Balance-to-Limit ratio is the second largest factor in your FICO credit score. It makes up 30% of your score and is calculated by your current balance of credit compared to your limit.
Balance-to-Limit Ratio: 30 for 30
The thing to remember when it comes to your balance-to-limit percentage is 30 for 30. This is a reminder that:
- 30% of your FICO score is made up of your balance-to-limit percentage
- The ideal use of your available credit is 30%
Your balance-to-limit ratio is one of the easiest ways to improve your score quickly. By lowering your balance to limit ratio you can improve your credit and lower your monthly interest charges!
Balance-to-limit is just one of the 5 factors that are calculated to make up your FICO credit score. Each factor is important to consider when attempting to improve your credit.
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