When we run someone's credit through the software that tells us exactly what to do to raise their credit scores, the most common recommendation is to lower the percentage of the person's credit limit that is being used.
Here are the percentages that affect credit scores:
- If the balance is more than 70% of your credit limit, it lowers your score the most.
- If the balance is 50% - 70% of your credit limit, it lowers your score a bit less.
- If the balance is 30% - 50% of your credit limit, it lowers your score even less.
- If the balance is below 30%, it will improve your score the most.
These percentages apply to individual credit accounts and also to the total credit limit of all credit accounts. So if you pay off a credit card account, do not close the account. That will lower your total available credit limit and therefore lower your credit scores.