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AMOUNTS OWED

WHAT IS A HIGH AMOUNT OWED?

FICO overachievers, 720 plus scores, keep an average balance between 1% and 3%, anything over 50% is too high according to FICO. If you are currently at 100%, get below 100%. Then 70, 50, 30, 10... Know when your lender reports. If you pay your balance in full when you get the statement, you are always reporting a maxed or high card. The creditors usually send in the balance and payment history 10 days before the statement closes or at the close date- but they do not turn in to credit bureaus right away. Call your credit card company, know when they report and pay your cards down a week before that!

Amount owed on accounts determines 30% of a FICO Score

Owing money on credit accounts doesn't necessarily mean you're a high-risk borrower with a low FICO® score. However, when a high percentage of a person's available credit is been used, this can indicate that a person is overextended, and is more likely to make late or missed payments.

Part of the science of scoring is determining how much is too much for a given credit profile. Your FICO scores take into account several factors.

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The amount owed on all accounts

Note that even if you pay off your credit cards in full each month, your credit report may show a balance on those cards. The total balance on your last statement is generally the amount that will show in your credit report.

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The amount owed on different types of accounts

In addition to the overall amount you owe, your FICO® scores consider the amount you owe on specific types of accounts, such as credit cards and installment loans.

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Whether you're showing an amount owed on certain types of accounts

In some cases, having a very small balance without missing a payment shows that you have managed credit responsibly, and may be slightly better than carrying no balance at all. Having a low credit utilization ratio can be better than having a high one, or none at all. For example, closing unused credit accounts that have zero balances and are in good standing will not raise your FICO® scores.

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How many accounts have balances

A larger number of accounts with amounts owed can indicate higher risk of over-extension.

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How much of the total credit line is being used and other "revolving" credit accounts

Someone who is close to "maxing out" several credit cards has a high credit utilization ratio and may have trouble making payments in the future.

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How much of the installment loan amount is still owed, compared with the original loan amount

For example, if you borrowed $10,000 to buy a car and you have paid back $2,000, you still owe (with interest) more than 80% of the original loan. Paying down installment loans is a good sign that you're able and willing to manage and repay debt