High credit utilization of your available credit accounts can have a negative impact on your credit score.
Credit utilization is the amount of credit you are using compared to the amount of credit you have available.
Most experts recommend keeping your overall credit card utilization below 30% of your total available credit.
High utilization on a single credit card could hurt your score if you have short credit history and only one card.
Lower credit utilization rates suggest to creditors that you can use credit responsibly without relying too heavily on it.
This goes to show that a low credit utilization rate on your part may be correlated with higher credit scores.
High credit utilization rates suggest you may be relying too heavily on credit, which can be a red flag for lenders.
This can also lead to higher interest rates and fees, which can make it harder to pay off debt and improve credit score.
Reducing credit card balances or increasing credit limits can help reduce credit utilization and improve credit scores.