Inactive credit cards—those that are accounts available to use but that you’re not regularly using to pay for items—can damage your credit score in a few ways. Impacts to your credit utilization ratio First, your credit utilization on the account will be zero percent. That sounds like a positive thing, right? Well, yes and no. …
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What’s the difference between installment credit accounts and revolving debts? The answer impacts your credit score and/or the way a potential lender evaluates your financial picture. Let’s unpack these credit buckets. Installment Credit Installment credit is a loan that offers a borrower a fixed, or finite, amount of money over a specified period. Examples are …
Credit utilization refers to how much of your credit line(s) is in use; it’s also called your debt-to-limit ratio. If your cumulative limit across your three credit cards is $10,000 and you carry a cumulative balance of $1,500, then your credit utilization is 15 percent. (Less than 30 percent is recommended.) Is it better to …
Continue reading “Is a zero balance credit utilization good for my credit score?”
