Credit card limit may have to be exhausted every month, here understand the complete maths of CUR
According to Credit Card Tips experts, it is very important for a good credit score that your credit utilization ratio should be less than 30 percent. Higher of this ratio is a negative sign for the credit score of the user. Not only this, it is very important for the need to increase your credit limit in the future.
If you also use a credit card and finish the card limit every month for your monthly expenses, then this article can be of use to you. Actually, the benefits of using a credit card are many, but it is also necessary to take many precautions to use the card.
How you use your credit card matters for your credit score. Payment history, credit utilization, and new credit are the main parameters for credit score.
To have a good credit score, it is very important that you maintain your credit utilization ratio properly. This ratio is the percentage of the credit limit used by the credit card user on the credit card.
According to experts, for a good credit score, it is very important that your credit utilization ratio is less than 30 percent. Higher of this ratio is a negative sign for the credit score of the user.
What is the disadvantage of CUR more than 30 percent
Fresh Credit: If the credit utilization ratio is more than 30 percent, it has a negative impact on the credit score as well as the credit limit. Actually, when the user applies for a loan or any other credit, then the CUR is seen.
Credit Limit: Sometimes the user needs to increase the credit limit. CUR also matters for increasing the credit limit. With a lower CUR, the chances of a user getting a credit limit increase are better.
To calculate the credit utilization ratio, you can divide the total balance of the credit card by the total card limit and multiply it by 100. With this formula, you can calculate the credit utilization ratio of your credit card.
