Finding A Balance For Too Much Or Too Little Credit
Lenders don’t want you to have too much credit, but they also don’t want you to have too little credit. It almost seems like you have to be a professional juggler to find the perfect balance to increase your chances for getting a loan approved.
Most experts will agree that you should keep your credit card balances right around 25 to 30 percent of your limit. One credit card with a large balance is much more damaging to your credit rating than several credit cards with smaller balances.
Almost one third of your credit score is based on the amount of money you owe when compared to the amount of credit you still have available. So, it’s important to work on getting your credit card balances paid down if you’re going to be needing a loan in the near future.
Lenders look at maxed out credit cards in one of two ways. Either your financially irresponsible and spend too much, or your financially unstable and are dependent on credit cards to get through the month. If you have several credit cards divide your charges over each one to keep one from staying too near the limit.