Available Credit
How Does Available Credit Affect My Credit Score?
The amount of credit you have available is a considerable factor in your credit score. As much as 30% of your score is based on how much outstanding debt you have, as opposed to how much credit you have available to use. Having less than 50% of your available credit open can adversely affect your credit score. It’s wise to try and maintain 75% available credit, as this demonstrates low risk behavior and can greatly improve your credit score.
Another important thing to remember is, after you pay off a debt, do not close the account, even if you never plan to use it again. By closing the account you are decreasing your amount of available credit and in turn decreasing your FICO score. If you already have closed accounts after paying them off, contact the creditor and try to reopen the accounts. To be clear, this does not mean go back and open a new account with he same creditor, as this is viewed much differently and will not contribute positively toward your length of credit history. Instead, attempt to negotiate reopening the closed account with that account’s history intact.