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8 Tips For Improving Credit Utilization Ratio For Credit Repair

by | Apr 5, 2024 | News

Improving your credit utilization ratio is an important step with credit repair. Here are some suggestions to help lower your credit utilization ratio:

1. Reduce existing balances: Begin by paying off as much of your current credit card debt as you can. Focus on the cards with the highest usage rates first.

2. Request higher credit limits: Get in touch with your credit card companies and inquire about increasing your credit limits. This can enhance your credit utilization ratio as long as you don’t boost your spending.

3. Maintain old accounts open: Closing old credit card accounts can decrease your available credit, potentially raising your credit utilization ratio. Keep these accounts active, even if you’re not using them regularly.

4. Use credit cards wisely: Strive to keep your credit card balances low compared to your total available credits. Aim to use no more than 30% of each card’s limit.

5. Make multiple payments throughout the month: Instead of waiting until the end of the billing cycle, consider paying off your credit card balances multiple times within a month, especially if you tend to use a significant portion of your credit limit each month.

6. Think about transferring your balance: If you have high interest credit card debt, consider moving your balances to a card with a lower interest rate. This can help you pay off your debt faster and bring down your credit utilization ratio.

7. Mix up your debts: If feasible, think about getting different types of loans, like a personal loan or a car loan, to vary the kinds of debt you have. This can enhance your credit mix, which makes up 10% of your credit score.

8. Keep an eye on your credit utilization ratio regularly: Monitor your credit utilization ratio closely and take action to lower it if it starts increasing. You can check this ratio in your credit card statements or by looking at your credit report.

By following these suggestions and consistently working on reducing your credit utilization ratio, you can make positive strides with credit repair and enhancing your overall financial well-being.