Credit Cards - Raise Your Credit Score

Credit score are influenced by many factors. The most common negative credit activity is maintaining high credit card balances and to many credit cards or revolving accounts. There is a balance you need to keep to maintain you credit rating.

The obvious failure to pay any ongoing credit amount within 30 days of the due date drives many credit scores downward. Just as damaging is carrying high balances in relationship to your available credit amounts available even with a perfect payment history. A good target is 5 to 8 credit cards total.

From each credit card statement find the total amount of credit available. It will be shown on the last statement as credit line or total credit available. Add the total of your credit line amounts for all your credit cards. You are looking for the ratio between the credit line and the balance outstanding.

Assume you owe $58,000 to six credit cards and the total balance owed is $30,700. The ratio of total available credit line to total balance owed is 53%. This will impact your credit score and drive your scores lower. The preferred ratio is between 20 to 30 percent total balance owed. This would be $11,600 to $17,400 as a total balance owed in this example.

Having credit card balances with high ratios owed to credit line totals can affect your score greatly. All other factors being in line with this one item you could easily see your credit score from 30 to 50 points lower than if you were in the preferred balances.

If you get the ratios even higher such as 70% of credit line used you should expect to see your credit scores drop up to 100 points. This is a very negative effect and will cost you money as your credit card companies will increase your credit costs by raising interest rates on your cards. Also new credit will be significantly impacted. You will see credit cost up to 36 percent when your credit scores drop into the 550 range.

If you are a homeowner you can take out a second mortgage loan and pay down or off your credit cards and lower your payments significantly. However you should not run up your credit cards again or you will be in a tougher situation. For mortgage or Real Estate help

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