Debt Ratio Management
What is a debt ratio? Debt ratio is the difference between the amount of debt you have charged versus the amount of money the credit card has authorized for you to use, which is also known as a credit limit. The difference between the two factors is your debt ratio. This can also be referred to as revolving credit (from a credit card you have available. If your credit limit is 2,000 dollars and you have charged 1,000 on the card, your debt ratio is 50%
30% of your FICO score is determined by debt ratio. Debt ratio accounts for second highest factor creditor agencies take into account when looking into your credit.
Debt ratio management can have an impact on your score, but unlike payment history, not everyone knows how to use debt ratio to benefit their credit.