BTCC
/
BTCC Square
/
Global Cryptocurrency
/
Understanding Credit Utilization Ratio and Its Impact on FICO Scores
Understanding Credit Utilization Ratio and Its Impact on FICO Scores
25
2
BTCCSquare news:
The Credit Utilization Ratio (CUR) is a pivotal metric in credit scoring, representing the percentage of available revolving credit currently in use. It directly influences 30% of the FICO score and 20% of the VantageScore, making it a critical factor for lenders assessing creditworthiness.
Contrary to popular belief, the 30% utilization threshold is not an ideal target but rather a maximum limit. Lower ratios signal better debt management and can lead to significant score improvements—potentially exceeding 100 points—alongside favorable loan terms.
Revolving credit management remains a cornerstone of financial health. Those who strategically reduce their CUR position themselves for enhanced borrowing power and long-term fiscal stability.
By:
