Credit Card | Credit Utilization
Credit Card Utilization: Credit card utilization is that how much balance you can have in your credit card. But there is limit that how much of your credit limit you can choose.
Limit Of Credit Limit
You can make purchases but beyond the credit limits , you won’t be able to make any purchase. If you exceed your credit limit. Then , you have to pay extra charges or perhaps penalty rate will also be increased. But to see that what your credit card issuer has conditions for setting the penalty charges.
If you exceeds your credit limit or even you are at the edge of it, it can affect your credit score. Your credit report has sent to the credit bureau monthly to keep them aware of your status. Because, this all information has needed to calculate your credit score. Credit utilization is a factor that keeps track of the information of your account. The greater the credit card balance is , the greater the credit limit will be and thus , consequently , higher credit utilization that will impact your credit score.You can use your credit over. And over again if you maintain friendly relations with your payment.
Credit Card Utilization
Credit utilization is what is going to impact your credit score.In order to maintain good credit score, you should take care of your payment history, level of debt or credit utilization, credit limit, mix of credit, credit inquiries. But the paramount factor that is going to influence the credit score is credit utilization. Use your credit wisely.
In order to maintain a good credit score , credit utilization is what is going to help you out. Credit Utilization can be define as, “ the ratio of your credit balance to credit limits. “It is a measure of the amount of your credit limit that has used by you.
If you want to calculate your credit utilization, then, simply divide your credit card balance by your credit limit. Then, multiply the result by 100. The credit card utilization score is inversely proportional to the credit score. The lesser the credit card utilization is , the better the credit score will be. It shows that you are using a small amount of your credit that has been granting to you. Your credit score that entails the credit card utilization, has calculated, keeping in record the account information that has been manifesting on your credit report.
Since, the information update and your credit report has updated monthly depending on your billing cycles and how wisely you have used your credit card. It is the balance in your credit card and the credit limit as of your credit card account statement closing date is what are required while calculating your credit score.
Now , you can calculate an estimated credit score if you read your credit card statement and understand it. Stay connected to know more about the bank pertaining information.