Understanding and managing your credit card balances one of several important tools for increasing your credit scores and an important one.

In another post, we talked about understanding how your balances affect your scores. That is, especially the percentage of your available credit that you use, aka, your “credit utilization.”

In general, the more of your available credit you use, the more likely it will be to negatively impact your credit scores. It usually goes something like this:

Zero impact (good or bad): 0%

Best range: 1-9%

Still good: 10-19%

Okay: 20-29%

Risky: 30-49%

Danger zone: 50-79%

Red alert: 80-100%

Disaster: over 100%

How to Optimize Your Credit Utilization

Here are just a few quick tips you can use to make your utilization ratio more attractive to lenders and healthier for your credit scores:

  • Spread out your charges. Use all of your credit cards a little, instead of one a lot. Even in credit scoring models that only look at your total utilization, preventing a max-out is still for the best.


  • Keep track of your credit limits. It seems obvious, but most people don’t actually write down their credit limits. Let alone track how much of their credit they’re using. Knowledge is power, and the only way to make sure to stay within your target usage range.


  • Increase your available credit. You can do this in two ways: 1. Apply for new credit cards once or twice a year, even if you don’t need them. This is a big secret that people with great credit do regularly. 2. Ask your credit card issuers for a credit limit increase. Again, credit-score ninjas do this once or twice every year. And the better your credit scores, the more likely your issuers will be to say yes!

Stay Focused on Your Credit Card Balances

Ultimately, higher balances will only negatively affect your credit, and therefore your credit scores. So, in very general terms, the lower your balances the better.

But just stating the obvious doesn’t really help.

One of the most popular methods for lowering your credit card balances strategically is the debt-snowball method.

Instead of attacking your highest balance first, pay down your lowest until it’s below 10%.

Then, put your money toward your next-lowest balance, and so on.

The idea is to stay motivated, seeing your progress as quickly as possible, while progressively paying down your debt up to the highest balance you owe.

You’ll also begin to see your savings in lower interest payments, which you can then reinvest into paying down your debt faster and faster.


Bring your credit balances down and optimizing them is one of the surest ways to improve your overall credit profile and credit scores.

There are many more strategies than these. Talk to one of our credit specialists today to create your perfect plan of action.

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