Does consolidating debt ruin your credit tennis dating atlanta
Credit utilization is the percentage of available credit you use each month.The credit bureaus want that number to be 30% or less.Participating in a debt management program will have a positive effect on your credit score for several reasons, the most vital one being that it teaches you the importance of on-time payments.While there are several other factors in a debt management program, just as there are several other factors in calculating a credit score, the overriding goal of a DMP is to get consumers in the habit of paying bills on time every month and reducing the amount owed so that your credit utilization score improves.This is the second most important category in determining a credit score.Owing money on a credit card is not a bad thing, as long as you pay down the debt every month. More than 65% of credit card users carry a balance from month-to-month.On-time payments account for 35% of your credit score and are the single biggest factor in a FICO credit score, the one used by over 90% of businesses.Amount owed (also referred to as credit utilization) is a close second, making up 30% of the score.
Consider this your “legacy card.” Just make sure it doesn’t have an annual fee.
Instead, you are making payments that reduce the amount owed.