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Discovering how one's Credit Use affects a FICO score is learned in understanding the term
credit utilization. Note (F.I.C.O = Fair Isaac Credit Organization - a.k.a. Your Credit Score).
The long and short of it is that: your credit utilization score is how much of your available line
you have versus what your balance actually totals. The more you start to max out your credit
about 30% of your credit score.
This makes complete sense, of course. Let's say that you have two friends looking to borrow
some money. One of your friends currently owes 23 different people about $1,000 a piece.
Your second friend does not owe anyone any money. Which friend is a better candidate to
loan your hard earned money to? Of course, the answer is obvious.
It's the same way that lending institutions and banks view the situation as well. If you are
constantly borrowing more money and maxing out your credit cards, they will be less likely to
fund your loan. However, if you are able to keep your balances at or below about the 30%
mark - of the available limit, then your scores will actually improve.
This is just one factor that is looked at. Other factors include:
>>> Payment History
>>> Length of History
>>> Types of Loans You Have
>>> Other Variables As Well
So, if you are looking for a quick boost to your credit score; pay down your credit cards and
your FICO will improve. In addition, if you have any late payments, see what you can do to
get those removed.
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