jimjones3 asked:
For example, I have 10 credit cards. Is the FICO score impacted by the total debt vs total credit limit? Or….Is it an average made up of the individual cards?
For example, I have 10 credit cards. Is the FICO score impacted by the total debt vs total credit limit? Or….Is it an average made up of the individual cards?
#1 by Tony Ning - February 3rd, 2010 at 16:45
Your FICO Score is impacted overall and individually.
You should strive for a 75% debt to limit ratio or less. Example: $10,000 limit maximum debt should be no more than $7,500.
You could have a total credit limit of $100,000 amongst your 10 cards and a total of $75,000 debt which fits the 75% ratio but if you have 1 bad credit card… eg. a card that is over limit, frequent late payments R2 R3 ratings, written off R9 etc… that 1 card will affect your FICO score.
To sum it up… it’s the overall and the individual credit scores that affect your FICO score.
Hope that helps.
#2 by Shannon - February 6th, 2010 at 01:40
It is based on the total amount, you should try to stay below 50% for the best Credit Scores.
#3 by SPIFIMAN1 - February 6th, 2010 at 03:05
It’s based on your total and you should never exceed 30% or your score will take a hit.