Sunday, December 20th, 2009
Is the FICO debt-credit ratio an average of each account or a total of all accounts?
jimjones3 asked:
For example, I have 10 credit cards. Is the FICO score impacted by the total debt vs total credit limit? Or….Is it an average made up of the individual cards?
For example, I have 10 credit cards. Is the FICO score impacted by the total debt vs total credit limit? Or….Is it an average made up of the individual cards?
December 21st, 2009 at 5:34 pm
Your FICO Score is impacted overall and individually.
You should strive for a 75% debt to limit ratio or less. Example: $10,000 limit maximum debt should be no more than $7,500.
You could have a total credit limit of $100,000 amongst your 10 cards and a total of $75,000 debt which fits the 75% ratio but if you have 1 bad credit card… eg. a card that is over limit, frequent late payments R2 R3 ratings, written off R9 etc… that 1 card will affect your FICO score.
To sum it up… it’s the overall and the individual credit scores that affect your FICO score.
Hope that helps.