High debt ratios are just that… high! Get them paid down as quickly as possible and see your scores jump up. Get revolving accounts below 45% and installment accounts below 80% is the best to start with. Of coarse, getting them below 14% would be ideal. But remember that getting installment loans below 80% and then keeping them for as long as possible will be best for your credit scores but paying the loan off as fast as possible will be best for reducing your interest fees. But we are talking about increasing your credit scores here, not what is best for your pocket book. Well, ok, it works well for your pocket book too, because you will get the best interest rates available and that will reduce your interest and be great for your pocket book.

What are these debt ratios we keep talking about? Well, there are two that we can talk about.

When talking about revolving credit we talk about debt to credit limit ratio, or the ratio of debt to our credit limit. If we use 100% debt to credit limit ratio, then we have maxed out our credit and don’t have any more credit available on this account or credit card. This is bad and shows the credit bureau that we are high risk and our scores will drop.

When talking about installment credit we talk about debt to original credit balance on the loan. Installment loans are mortgages, student loans, car loans, etc. and that have an original balance or high balance and no credit limit. Going over 80% is bad and costs you points. This is a paradox because when you get the loan it is at 100% already and unless you pay it down below 80%, you are stuck with a bad situation. Now this isn’t as bad as a revolving loan because the credit bureaus know that you can’t do anything about it until you pay it down with time and payments, so they are less hard on these types of loans. But it is a good idea to pay then down as quickly as possible to lessen the impact of their affect on credit score.

When you have a new credit card, the tendency is to start using it and using all the credit available up to the credit limit. Don’t! In fact, it would be good to keep a balance on the account for the first 6 months at or below a 14% debt to credit limit ratio to show that you really don’t need the credit and are in control. Then, never ever, ever, ever go over 45% debt to credit limit ratio. If you ever need to use more than this, call and ask for a limit increase before you use it and keep your balance below the 45% debt to credit limit ratio. This will keep your scores high and show that you are in control.

Duplicate accounts can be good or bad for your order credit scores only online depending if they have a balance or not. If you are using the account then there will be 2 accounts with balances that affect your number of open accounts with balances and can put your revolving and installment accounts out of balance. It will also affect your debt to credit ratios and over all debt to credit ratio. If there is no balance on the account and it doesn’t throw your balance of accounts off, then it could work to your advantage. The credit limit will also work to your advantage if there is no balance because it will be added to your overall debt to credit limit ratio and lower it and increase your credit score. But watch it… if these things change by using the account then it can work against you and you will have to get one removed by contacting your creditor and asking them to remove the duplicate.