Credit cards provide the ability to build a credit record and receive a credit score, along with many other benefits. If you have a high credit utilization on your cards, you might find yourself with lower credit scores. This makes it a more difficult time making larger monthly payments, and a higher interest rate on your cards if you make any payments late.
The credit utilization ratio is the percentage of a borrower’s total available credit that is currently in use. The credit utilization ratio is a component used by credit reporting agencies in calculating a borrower’s credit score. Lowering the credit utilization ratio can help a borrower to improve their credit score.
Credit utilization has a big influence on your credit scores, so you should know what it is and how you can manage it to get the best credit rating and the benefits that come with it.
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