Posted on June 24, 2009 - by admin

Raise Your Credit Score By Lowering Credit Card Balances

Even if you’ve paid every single one of your credit card payments on time, your credit cards might still be hurting your credit score. While timely payments are crucial to a good credit rating, they can quickly be offset by balances that are at or near your limit.

To potential lenders, maxed out credit cards insinuate that you’re living beyond your means. They will assume that your monthly income isn’t enough to meet your needs and you survive by charging everything. It can project a careless, irresponsible financial situation that is going to get out of control.

Most experts recommend that you keep your credit card balances at no more than 25 to 30 percent of your total limit. Although paying off credit cards can save you money in the long run, if you’re planning on trying to get a loan in the near future, paying down your balances is a better choice.

By reducing all of your credit card balances to the recommended amount, you can literally raise your credit rating. It’s one of the fastest ways that you can improve your credit score and have a better chance of getting approved for that new loan.