Why do you want to aim for a 30-35% usage of available credit?

First, is this simply a common piece of advice that's supposed to help people keep their credit card spending habits under control, or is it an actual percentage to strive for in order to maximize your credit rating?





Second, if it's the "ideal percentage" that maximizes credit score, why is this? Shouldn't it be ideal to use 100% of available credit (assuming you pay it off in full every month) in order to maximize your utilization rate?|||With 30 percent of your credit score linked to the amount of money you owe, one of the most important determinants of your credit score is your utilization rate, which considers your credit card balances as a percentage of your credit card limits.





Your utilization rate is derived from the percentage of debt on credit cards held against your credit card limits. A high utilization rate on your credit cards sends the message to creditors that you might be overextended, increasing the likelihood that you will make late payments. As a result, credit-scoring bureaus reward borrowers with utilization rates under 30 percent; borrowers with utilization rates above that threshold are penalized.





30 percent is the threshold, so to speak. If you do carry balances to get the maximum "bang" out of your credit score, do not carry more than 30%.|||It is a huge part of your FICO score.


Any time you are using more than 30% of your available credit your rating starts going down.


Use 75% and you are causing utter devastation to your score.


It is in no way a myth.





The ideal way to use credit is to charge something you need like food or gas and pay in full each month.


It is 100% myth that you need to pay interest to keep good credit - nothing could be further from the truth.


By paying in full, you never pay interest and by charging something like gas, you make the card comapny happy since they make up to 5% from the merchant from each purchase you make.





Ideal percentage - keep it below 30% - and pay in full each month.


Statistics show that maxing out makes you more likely to default on your credit cards.


/|||It is related to your credit rating.





But you want to aim for less than 30%.





If it goes up to 30-35%, that hurts your credit rating.





If it goes up to 100%, that hurts your credit rating more.





To maximize your credit rating, you want a LOW utilization rate.