As we learned in the last tip Amounts Owed, 30% of your total score is mainly comprised of your revolving debt and its utilization. Now, you may think it impresses the FICO scoring algorithm to max out your credit cards/store cards and to continue to be able to make payments, but all that really does is cost your right kidney in interest and crush your scores.
Managing your revolving accounts is a tricky situation: you get penalized if you are using them too much (FICO penalty code 10); you get penalized if you don’t have any (FICO penalty code 15 & 16); you get penalized if you have them but are not using them (FICO penalty code 24); you get penalized for having to many or too few (FICO penalty code 3, 4 & 26) and you also get penalized by using a few of them at once even if it’s not very much (FICO penalty code 5). As you can see, the conspiracy of course is to make sure you have really no idea what to do and therefore pay the “powers that be” as much money as possible in higher rates.
I can’t possible give you the answers on exactly what to do in your situation in a little credit tip, so the real tip on your revolving credit is to run your situation by us with a free analysis so that you can receive the loans you need at the rates you desire.
Please call (888) 795-9088 and don’t forget to pass along your referral source to qualify for a $100 discount which is over 50% off our initial fees.