ECONOMICS
CREDIT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Your debt to credit ratio
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How much of your credit you actually use
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both of these
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None of the above
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Detailed explanation-1: -Your credit utilization ratio, generally expressed as a percentage, represents the amount of revolving credit you’re using divided by the total credit available to you. Lenders use your credit utilization ratio to help determine how well you’re managing your current debt.
Detailed explanation-2: -Your credit utilization rate is an important indicator of lending risk. In the eyes of most lenders, a person who constantly charges all the money they can-hitting or going over their credit limit on a regular basis-is more likely to have difficulty repaying that money.
Detailed explanation-3: -Add up all of your revolving credit balances. Add up all of your credit limits. Divide your total revolving credit balance (from Step 1) by your total credit limit (from Step 2). Multiply that number (from Step 3) by 100 to see your credit utilization as a percentage.