ECONOMICS
CREDIT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Hurt
|
|
|
Helped
|
|
|
Either A or B
|
|
|
None of the above
|
Detailed explanation-1: -According to the Consumer Financial Protection Bureau, experts recommend keeping your credit utilization below 30% of your available credit. So if your only line of credit is a credit card with a $2, 000 limit, that would mean keeping your balance below $600.
Detailed explanation-2: -Reporting a balance on your cards of more than about 30 percent of its maximum credit line will hurt your score and carries additional risks. The lower your balances, the better your score-and a very low balance will keep your financial risks low.
Detailed explanation-3: -“It could hurt your score if you max out on one card even if the others have a low utilization rate, ” said Rod Griffin, director of consumer education and awareness for Experian. He also said that when you cross the 30% utilization ratio, your score begins dropping faster if your debt continues to climb.
Detailed explanation-4: -Pay off your balances more than once a month. Request a higher credit limit. Avoid closing credit cards.