Using the Debt-to-Credit Technique to Increase Your Score
Whenever there’s a need for anyone to raise the figures on their credit report, I recommend several methods. However, there’s one particular technique that anybody can use which, quite fortunately, requires just measure of self-discipline. It is the method of lowering your debt-to-credit ratio to the lowest possible. While some experts have advocated 10, 20 or 30 percent, I believe the 20 percent mark is a reasonable level you should aim. You will understand what these all means by the time you finish reading this article.
Your debt-to-credit ratio on your cards is calculated by dividing your total card limit for one month by your total spending for that same month. Imagine for a second that the limit your card-provider has given you for this month is $ 8,000. If at the end of the month it is calculated that you have made expenses totaling $ 6,000 then your ratio will be calculated thus: $ 6,000/$ 8,000=75%. Seventy-five percent is a very high ratio, and this is a figure you should try to keep to the lowest possible in order to raise your score. 75 percent will definitely impact your rating negatively as it will deduct points from your report.
The easiest way to stay out of credit trouble using your cards is to keep your expenses for every month to a maximum of 20 percent. Do not exceed this mark. If you feel a need to spend more but you do not want the negative consequence that will come as a result, you can talk to your lender about it. You stand a good chance of being approved for a limit increase if you’ve maintained a pretty good ratio.
The above methods I have explained will definitely make some remarkable improvement on your file, in addition to deleting erroneous or negative information that may be contained on your report with the reporting agencies.
Visit improve your credit score to learn more about ways to positively impact the scores that are attached to your Equifax, Transunion and Experian file!