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FICO Credit Score: Maintain a 50% debt to credit-limit ratio on _each_ card?
I have been advised that I should transfer part of a balance of one credit card to another card in order to maintain 50% debt to credit limit ratio on _each_ card even though my _total_ debt to credit limit ratio is already below 50%. (Most of the debt is on one card for convenience.)
I could easily transfer part of the balance to an unused card with the same interest rate. Obviously, doing so would not effect my total debt to credit-limit ratio; rather, it would be a kind of shell game. Logically it should not matter to credit bureaus if I carry a debt on one or two cards. In fact, logically, I would assume that moving debt around from one card to another would hurt my FICO score. However, financial issues aren't always "logical." Bottom line: Is one's FICO score effected by one's _total_ debt to _total_ credit-limit ratio? Or is the FICO score effected by the debt to credit-limit ratio on _each_ credit card? Thanks for your help. |
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It is OK if you put all the balances on the card with lower interest an keep the cards with no balance open, It will not change your debt/credit ratio or your score, really is showing to the rest of the credit card companys that you know how to manage your finances, they will probably offer you a better deal.
In the other hand 50% is not the best for your score if you take the ratio down to 25 or 15% you will see an increase of at least 10 to 30 points on your credit score. |
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