How can I lower my credit card utilization?
Here are three tips that may help you lower your credit utilization:
1. Make your credit card payments more than once a month. This way, your balance never gets too high and you don’t have to pay a huge sum at the end of the month. Your credit card issuer will typically report your credit activity to the credit bureaus once a month. So, if you pay off a portion or even all — of your credit card bill before that date, you can lower your credit utilization.
2. Spread your charges across multiple cards each month. Using several cards will result in multiple accounts of low credit utilization rather than one account with high utilization. Don't forget, however, that certain credit scoring models will look at your overall credit utilization and/or the utilization on individual credit cards, so this technique may not always work in the end.
3. Increase your available credit. If your income has increased, you’ve maintained an amazing credit history, or you have little debt, it doesn’t hurt to ask for a credit limit increase just for fun. Just remember that this can sometimes result in a hard inquiry on your credit.
While experts recommend keeping your credit card utilization below 30 percent, it’s important to note that creditors also care about the total dollar amount of your available credit and not how much you are spending. If you find yourself in more credit card debt than you can handle, you might also consider finding a debt consolidation partner. This means that if you have a low credit limit, it’s not necessarily a huge deal if your credit card utilization rate is slightly higher than recommended, simply because your limit is lower!