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6 • How Much You Owe is a
Trick Designed to Cost You!

The Amounts of Credit Owed contributes 30% to your credit report calculation! This also has a profound effect on your credit rating and there are traps for the unsuspecting consumer. This can be easier to clean up than payment history, but this requires understanding hidden rules and financial discipline to stay under the radar.

FICO chart series

If you spend more than 30% to 40% of a credit limit, you will cause damage to your credit rating. Rather than having one or two accounts at 75% usage its is better keep each balance lower than the safety threshold by spreading your credit over numerous accounts.

On hearing this, don't run out and apply for a number of new credit cards, just to increase your available credit limits and spread your debt around. Every application is going to cost your credit rating and backfire to actually lower your credit scores. It is best, to wait until you are offered preapproved credit accounts where accepting will not hit your rating as an application for credit.

You get credit education and guidance with Programs to Fix Your Credit!