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A blog dedicated to the online bill manager known as Bill Tracker Online.
Friday, May 15, 2009

Your Credit Profile Guide: Balances

Did you know that spreading your debt over many accounts can improve your credit score? It is always recommended that you spend no more than 25% of your available credit on any revolving credit account. Keeping your balances as close to or below this percentage is a guaranteed way to improve your credit profile. You can also refer to this percentage as "credit utilization". To calculate your credit utilization, you simply take the balance of your account and divide it by your credit line or credit limit. Here is an example:

Credit limit: $1,000
Balance: $250

$250 / $1,000 = 0.25 which is 25%

Likewise, to calculate how much of a balance to carry on your credit account, simply take the credit line or credit limit and multiply it by 25%. Here is an example:

Credit limit: $4,000

$4,000 * 0.25 = $1,000

Based on this calculation, you should not exceed a balance of $1,000 to maintain an improved credit score.

With Bill Tracker these calculations are done for you automatically and are viewable in your bill details. Keep your information up-to-date with Bill Tracker and you'll always have a live snapshot of your current credit utilization for individual accounts as well as total utilization of all revolving credit accounts.


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