Building Good Credit
Balancing Your Credit Score
Whether your credit is considered excellent or only fair, if you are not watching your credit balances you could be hurting your credit score. Most people concentrate on making timely payments and avoiding too many credit inquires in order to maintain high credit scores. One of the more heavily weighted components of the credit score is based on your credit balances in relation to your credit limits. Any credit card balance that exceeds 30% of the credit limit can hurt your score, even if it is just one of several credit card accounts.
It is important to manage your credit card accounts monthly to check your balance to limit ratios. You should focus on paying down accounts that are approaching or exceeding 30% of the account limit. It may be the one time you should consider transferring a balance to another card for the purpose of leveling out your account balances.