September 2014 – Tip for Raising Your Credit Score…
Ask for a higher credit limit
Your credit card utilization rate is one of the most significant factors of your credit score. It tells lenders how much of your available credit you’re using. You can calculate yours by dividing your total credit card balances by your total credit limits and converting that into a percentage. In general, a lower credit utilization rate means a higher credit score.
There’s no strict guideline on what percentage to aim for, but, on average, consumers with a credit utilization rate between 1 and 20 percent generally have a higher credit score than consumers with a credit utilization rate over 20 percent.
Paying down your credit card debt will decrease your utilization rate, of course, but many consumers don’t realize you can ask for a credit limit increase to accomplish the same goal in the short term. A higher limit can also help you maintain a low rate in the future. Give your credit card company a call – or use their online request feature – and ask for a credit limit increase. Of course, this tactic works best if you’re a customer in good standing.
Tip: Make sure your higher credit limit doesn’t tempt you to spend more on your credit cards. This method is most appropriate for those who have good control over their credit card spending.