A FICO credit score affects a consumer’s ability to secure new credit. Whether a consumer is looking to earn a perfect credit score or clean up previous credit mishaps, it helps to have a few tips. Simple factors such as payment history, credit balances and new credit could be negatively affecting a credit file.
Manage Credit Balances
It’s easy to let credit balances get out of control. However, according to MSN Money, maintaining high credit card balances hurt the FICO credit score. Keep credit card balances to 30% or less of the total available credit. If balances creep past this ratio, a decline in the score may be experienced.
When thinking about credit card limits and balances, don’t forget about tempting balance transfer offers. For example, if a consumer takes advantage of a balance transfer offer, it could push the total balance past the 30% threshold. Even if the interest rate is good, this could be bad news for the FICO credit score.
