Best Credit Card Utilization Calculator

06:31 AM August 06, 2019

Have you ever thought about how your credit card spending could impact your credit score? Figuring out your credit card utilization rate and how to make smarter financial choices can always affect your credit score for the better. Read on to learn more about how you can improve your credit score. It is always important to know more about how to calculate your credit card utilization rate. Also, learn what your options are and wh other smart choices that you can do today.

What is Credit Card Utilization?

Improve Your Credit Score: Try the Best Credit Card Utilization Calculator

Do you know what a credit card utilization is? The ratio of your how much is left in your credit card balances to the limit of your credit card is credit card debt. It’s a way to figure out how much credit you are using that’s available to you each month.

Some people might splurge whenever they have a lot of money left over on their credit card, but not using all or most of it can be beneficial to your credit score.

How is this? The money left over on your balance each month affects your credit card utilization rate. Which also influences your credit report. Having too low of a credit score even when you pay your bills on time could all come down to spending too much credit on one or more of your credit cards.  

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When a person maxes out their credit card, most might think they’ll just pay their bills on time. However, being a higher credit risk will influence other parts of your life that could negatively impact getting a loan. Regardless of the loan is for a house, business, or other material possessions that would require a credit check. This will take months to years to bring your credit back up to a high enough score to get those loans.

Of course, all is not lost if you have been maxing your card each time. You can try having a percentage of 30 or less would be ideal for making better financial choices. Having a low percentage like 30 or less can show your future loan lenders that you can make smart choices with the money that is loaned to you. Also, you should always pay your bills on time or even paying more than once on a bill to help increase your low credit score by using this helpful tool.

Credit Card Utilization Rate

Improve Your Credit Score: Try the Best Credit Card Utilization Calculator

So, how do you calculate your very own credit card utilization rate? It’s straightforward since all you need to know is how much you have in your balance and the limits on all your credit cards.

For example, if you spent $400 and your credit card only gives you $1,000, then you can easily calculate the ratio by dividing how much you spent by the total amount you are allowed to spend and multiply that number by 100. Therefore, the percentage of your credit card utilization is 40 percent.

You will have a higher percentage of credit card utilization rate if you spend more than $400. So, the lower your credit utilization is, the better off you are with your total credit score.

When a person has a low credit utilization, it portrays if you are spending the maximum amount of credit you are limited to each month.

Again, this is crucial to those who want to get a bigger loan for a house or small business since it portrays to the particular lender that you can handle money without going crazy overspending the maximum amount.

Of course, if you are worried about your overall credit card utilization rate, you can instill the same mathematical formula for your overall credit utilization rate. This means you can add up all the money you currently have in each credit card balance that’s in your name and divide that by the total credit limit, then multiply the answer by 100.

This will help you figure out how much this could be affecting your fico score. If you have one credit card that has a high credit card utilization rate, then that could be the main one that’s creating a lower credit score.

Check if you qualify in two simple steps

  • Step 1 – Select your debt amount below to see if you’re eligible
  • Step 2 –Answer a few quick questions & join hundreds of thousands of Americans on the path to becoming debt-free

How Does Debt Consolidation Affect Your Credit Score

Improve Your Credit Score: Try the Best Credit Card Utilization Calculator

Debt consolidation is basically when you get a loan to pay off the total amount of debt that you have accumulated. However, despite what it might sound like, it’s not something that will make your debt go away like magic. Instead, this means that you are given the opportunity to pay one single payment each month.

This can be a good idea for those who get anxious over keeping up or paying several bills at different times of the month. Sometimes this can even become so hectic and time-consuming figuring out when and how much they’re due that some might also forget some other bills or ignore them.

Utilizing debt consolidation makes it easier for people by only having one monthly payment for you. Also, another great news about this is the interest rate.

Most loans will have high-interest rates that seem good at first but tend to create an even bigger bill in the end. However, with debt consolidation, you are stuck at a lower rate! You might want to consider debt consolidation if you are trying to figure out a way to reduce your financial stress and lower your interest rates with those other unsecured debts.

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If you don’t want such an adverse effect on your credit score, you might want to consider debt settlement. This type of financial solution is similar to bankruptcy, but it doesn’t have such a significant effect on your credit score.

What Will Influence Your Credit Score?

Debt consolidation can actually influence your credit score for the better. This is because it makes it seem like you already paid off those accounts that you owed before. Then, the debt consolidation comes up like a new credit account. This approach can be very beneficial to your credit score. Although, you should always remember to do not stop making payments on time. Every time so that it doesn’t lower your credit score.

Don’t go checking your credit score the first month after you take out debt consolidation. It could take time before this can alter your credit score.

We do not suggest getting other credit cards while you are still paying off your debt consolidation. This might not be the smartest choice since you have made efforts to consolidate your debt efforts. But, some people do this, so if you do, just always make sure that you continue paying both of those bills on time to help increase your credit score.

How Does Debt Relief Affect Your Credit Score

Improve Your Credit Score: Try the Best Credit Card Utilization Calculator

It’s always essential to retain a high credit score. Regardless if you want to apply for a loan, credit card, or mortgage. They will check your credit score to ensure that it’s not too low. Typically, a low credit score shows them that you aren’t to be trusted with paying them back.

Life does get in the way of maintaining a high credit score.  Losing a job, taking on too many credit cards, or making several bad financial decisions can all attribute to financial setbacks. You could get to the point where you aren’t able to take advantage of debt consolidation and don’t have any other choice.

This is when you might have to take some drastic financial decisions to get yourself out of the hole.

This is where debt relief, such as bankruptcy and debt settlement, can benefit you. Bankruptcy means you give all control of your assets to a court-appointed trustee where they can sell your stuff to pay off your debts. However, this will also mean that they will remain on your credit history for at least seven to ten years.

You really shouldn’t choose this option unless you are out of all options since it will drastically influence your credit score.

That’s right! Your credit score will drop when you file bankruptcy no matter what you do. However, if it was a high score before you file, then weirdly enough, it will fall more. For example, if your score was as high as 800, then it could decrease to 550. That’s a dramatic drop and could have your future lenders thinking that you are too risky.

This could affect your ability to get a loan, house, or car in the future, so always be absolutely sure before filing for bankruptcy.

SUMMARY

When you choose a debt settlement company, it will hurt credit score as it will drop temporarily no matter what. This is the case even when you had a high score beforehand. Meaning it will fall more after you choose this program. Debt settlement will drop half of what your credit score would have with bankruptcy.

This means you can get your financial life back on track faster than the bankruptcy alternative. This method would expedite So that dream house you’ve had your eye on or getting a loan for a family car is that much closer. Debt settlement program might be for you for the fastest most effective corrective plan of action.

You should always make financial decisions after thinking it over. This will make sure you go through all your options with your family or accountant before selecting an option.

There’s always a way to increase your credit score if you ever have financial issues. Staying up to date with your credit card utilization rate is very important. Additionally,  knowing your options for when paying off your total debt can be detrimental in retaining that high credit score. So, make those smart choices so you can get that dream house!

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