Studying for my substance abuse test on Tuesday suddenly triggered me into thinking about my credit score… yeh, idk why? Anything but studying right. lol!

I pulled up my FICO report that I did last July (2010) and saw my score was only “good” not “excellent”… So, I did some research on how to increase your credit score (yes. i know, I should be studying), and found out that a revolving utilization ratio has an effect on your score.

You’re probably asking what the hell is a revolving utilization ratio? Well, it’s the balance-to-limit ratio. If you were to total the balances on all of your credit cards then total the limits on all your credit cards and then divide your balances by your total limits, you get your revolving utilization ratio.

Most lenders encourage you to keep your ratio under 35%. Anything above 35% can decrease your credit score. So, if your revolving ratio is higher than 35%, which mine is, you have two options: decrease your balances or increase your credit limit.

You may be wondering if this is a trick question. Well it is, kind of. Why would I decrease my balances, if I can just increase my limit. Well, lenders control your credit limit and often determine these limits based upon your history. For you to inquire an increase in credit limit can in fact decrease your credit score (it’s tricky). But only temporarily! Your credit score will drop, but only for a short period, once you fall below the 35% revolving utilization ratio. After you meet that ratio, your credit score will rise, and this isn’t temporarily (if you manage your credit lines right).

…back to studying mental health #ponderingmindofmine