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Stesso

Control Credit Utilization (30%)

0:41
1:23
6.6K views

At 0:41 in

Money Monday credit score

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What happens here

This step focuses on 'Credit Utilization,' a highly significant factor contributing 30% to your credit score. The speaker defines credit utilization as the ratio of your current credit card balance to your total available credit limit. He provides an example: if your total credit limit is $1,000, you should aim to keep your balance under $100 (10%). While a utilization of up to 30% is generally acceptable, banks prefer to see it below 10%. Keeping balances low is crucial for this component. The wooden block labeled '30% Credit Utilization' is then removed.

Goal: Maintain low credit balances relative to credit limits to maximize the 'Credit Utilization' component of your score.

Tools and materials

  • Hammer — Used as a prop to visually 'remove' the credit factor block
  • Wooden Block — Represents the 'Credit Utilization' component of the credit score

What they say

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its thing, just like investing. Anyways, let's move on. Now we're getting down to your last two big ones, credit utilization. Let's say your total overall spending limit is a thousand dollars. Keep it under 10% of that. Keep it under a hundred. You can go up to 30, that is fine, but banks like to see under 10. So, if you have a thousand dollar max limit, keep it under a hundred. Let's move on. And the biggest thing that makes up your credit score, payment

Auto-generated from the video audio.