Does your credit score go down when you owe allot on your credit cards?

It reflects in your credit report and it is not a very good sign. For instance say that you have 5 credit cards with $1000 credit limit for each. Therefore you are responsible for $5000 of possible debt. But when you close 4 of them, now you are only responsible for $1000 of debt which lowers the level of risk of lending money to you. However it is all depends on your level of income too. The important thing is debt/income ratio which should not be very high.

It goes down if you miss a payment. Once your payments become late.. your interest rates go up on the cards making it even harder to keep up.. that affects your rating big time..Cut some cards up if your behind,but don't close out the account.. that will also lower your rating..

If you are a regular payer, and stay within limits, then NO

yes. and you do know that .

OOooooohhhhhhh yeaaaahhhhhh!!

Yes it does. The best starting point is knowing how the system works. Your credit score is determined by the following:

35%: Bill-paying history. Mostly everyone knows how important it is to pay your bills on time. And that's because that's the factor that can the most impact your credit score. It's also worth noting that it's more a question of pattern. What that means is that one 60-day late payment will have less of an impact that a string of 30-day late payments

30%: Debt usage ratio. That is the amount of debt you have outstanding compared to your total credit limit. A generally accepted rule of thumb is that this ratio should be kept under 25% for best results. Between 25 and 50% isn't too good for you, but the impact is fairly manageable. Going over 50% should definitely be avoided

15%: Length of credit history. The longer your history, the better. It allows any potential lender to have a more accurate picture of you.

10%: Mix Of Credit. Showing the ability to successfully manage different types of credit has a posotive impact on your score (revolving credit, consumer finance, installment loans, and so on)

10%: Pursuit of new credit. Having many recent inquiries on your credit report is interpreted by lenders as a sign that you're financially strapped. The good news is that since shopping around for a loan is the smart thing to do, credit score calculations have been altered so that all inquiries of the same type, made within a reasonable time frame (15-30 days, depending on the type of loan in question), count as one single inquiry.

The credit score calculation formula gives more "weight" to new information, making it easier to offset previous negative information with a couple years' worth of good behavior. Of course, it also works the other way and one bad year will greatly damage an otherwise perfect picture

Because of the "debt usage ratio" and "length of credit history" factors, it's unwise to close credit accounts even if you've paid them off. Doing so reduces your credit limit, so any ratio you had will automatically become higher. And it's also like you're deleting credit history because that information is no longer accessible to lenders. In short, the longer you've had the card, the bigger the limit, and the better you've managed it, the more you stand to lose by canceling it.

no, your credit goes down when you don't pay the bills on time

Aslong as you keep up with the minimum monthly payment. You should be in good shape. Just never be late. If you dont get your bill. Dont use the excuse that you didnt get it. When in doubt call the company and ask when your bill is due. Use your own envelope if you must.

Yes. The more you owe, the lower the score gets.

yes.

It is dependent upon your debt to credit limit ratio and also based on the percentage of your disposable income.

if your average daily balance <30% of the card limit, you're good. if it's 30-50% it is not as good, if it's 50-70%, then it's bad, and if it's over 70% then it's very bad.

If you pay it off in full each month, then your average daily balance is 0

That depends if you are paying them on time or not and on a regular basis. If you have skipped alot of payments or paid late then yes your rating will go down. Otherwise no, it looks good on your credit.

I believe that it does....

Enter Your Message or Comment

User Name:
User Email:
Post a comment:

Archive: Forum -Forum -Finance - Links - 1 - 2 - RSS - All RSS Feeds
The Causes and the Results. 0.054
Copyright (c) 2011 Financial Crisis Sunday, May 27, 2012 - Terms of use - Privacy Policy