The Effect of Revolving Credit on Your Credit Score
The amount of revolving, or credit card, debt you have open plays a huge role in determining your credit score. However, what most people learning about fixing bad credit don’t know is that the percentage of your revolving credit in use is even more important than the total amount of credit lines you have open. By making full use of your credit lines, your credit score can go down by several hundred point s or more.
This also means that its possible for you to have a lower credit score if you owe $400 on a card with a $500 limit than if you owe $1000 on a card with a $10,000 limit. In the first example, you are using eighty percent of your available credit limit, while in the second example you are only using ten percent of your credit limit. The eighty percent number is what ends up on your credit history, damaging yor credit report.
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