Utilization Ratio

With Christmas fast approaching it’s extremely easy to get carried away using your credit cards to shop for gifts.

If you spend excessively you may run the risk of running the cards up too close to the credit limit.

The closer you get to the limit on the cards the more damage you are causing to your credit score.

The credit gods, aka the credit bureaus, consider you much more of a future credit risk as you get closer and closer to your credit limit.

The reason is that the nearer you are to the limit the more of an impression you are giving to a future lender that you are relying on using the cards.

Believe it or not the creditors love that you are using the cards. They earn money by charging you interest on your purchases.

However, try and be disciplined about how much you charge especially during the holidays.

The best gift you can give to yourself is a good payment history and a great credit score.

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