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Credit Utilization Tips

Credit utilization is the amount of your credit limit that you're using at any given time. It's an important factor that affects your credit score, as lenders and credit bureaus use it to gauge how responsible you are with credit. Here are some tips to help you manage your credit utilization:

  1. Keep your balances low: Try to keep your credit card balances as low as possible. Ideally, you should aim to use no more than 30% of your credit limit. For example, if you have a credit limit of $10,000, try to keep your balance below $3,000.

  2. Pay off your balances in full: Make sure you pay off your credit card balances in full each month. This will help you avoid interest charges and keep your credit utilization low.

  3. Use multiple credit cards: If you have multiple credit cards, try to spread your purchases across them. This will help keep your credit utilization low on each card.

  4. Request a credit limit increase: If you have a good credit history, you may be able to request a credit limit increase. This can help lower your credit utilization ratio, but make sure you don't use the extra credit to accumulate more debt.

  5. Monitor your credit reports: Keep an eye on your credit reports to make sure that your credit utilization is being reported correctly. If you notice any errors, dispute them with the credit bureau to have them corrected.

Remember, managing your credit utilization is an important part of maintaining a healthy credit score!


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