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How Credit Card Utilization Ratios Impact Business Credit Lines

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Credit Card Utilization Ratios

You’ve probably seen time and time again the importance of keeping your credit card utilization ratios at or below 50%. The fact is keeping your credit utilization ratios as low as possible is just plan smart. In fact, “Consumers with FICO® scores of 800 use, on average, 7% of their available credit,” says Can Arkali, senior scientist for analytics and scores development at Fair Isaac Corp. credit card utilization ratio

Now to clear up any confusion this doesn’t apply to installment loans such as auto loans, mortgages and student loans. The ratio for installment loans is known as your installment utilization ratio.

Revolving lines of credit such as credit cards is what is referred to as credit card utilization ratios. Your credit card utilization ratio is a measure of how much you owe on a credit card compared with the card’s credit limit. For example, if you have a credit card with a $10k credit limit and you currently have an outstanding balance of $5k then you currently have a 50% credit card utilization ratio on that card.
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Top 10 Types of Credit Scores Business Owners Should Know

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Types of Credit Scores

Do you know you have over 56 credit scores with FICO®?

According to Bankrate, Experian and Equifax each provide 16 different FICO® credit scores to lenders alone. On top of that FICO® is just one of the many types of credit scores being used in the marketplace. types of credit scores

So how do you keep track of all the types of credit scores and which ones are most important?

Below we have compiled our top ten types of credit scores business owners like you should know.

Base FICO® Score versions – There are many types of FICO® score versions being used today but they all share a similar groundwork. As you know FICO® has updated its scoring formulas several times throughout the years to keep up with constant changes in the credit landscape. The newest version released is FICO® Score 9. While some lenders adopt new versions fairly quickly, some lenders make take years to upgrade. What’s important is that you check, monitor and optimize your base FICO® Scores prior to applying for funding.
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Get Higher Credit Limit Cards through Strategic App Placement

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Get Higher Credit Limit Cards

When it comes to credit cards, applying for either business or personal cards involves preparation, especially if you want to maximize the size of the credit limits you get approved for. Did you know a few mistakes – some of them you may not be aware of – can hurt your chances for getting approved? get higher credit limit cards

Let’s first talk about inquiries.

You may already know that there are two kinds of inquiries that can occur on your credit report: hard inquiries and soft inquiries. A credit card issuer will check your credit report when you submit an application which triggers a hard inquiry on your report.
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Why Build My Business Credit?

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Why Build My Business Credit

Although the lending market is always changing and evolving the one thing that is constant is business credit.

In a recent interview with Franchise Gator I answered a few questions about the importance of building business credit. Here are some of the highlights from that interview. why build my business credit

What are the most important lessons you’ve learned in your career about funding a business venture?

“An important lesson I’ve learned is the power of business credit and the leverage it provides. The stronger the credit you have both personally and for business, the more options you have and the better the terms and rates you’ll receive.”

To add to that, remember there are funding programs that look at factors other than personal credit alone such as revenues, outstanding invoices, purchase orders, business assets, etc.
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