A debt threshold is where the report to credit bureaus can hurt or help your credit scores.  When talking about your debt-to-credit limit ratio, there are certain points that can hurt or help your scores depending upon whether you are increasing your debt or decreasing your debt.  One example we teach is that you should never go over 45.91% debt to credit limit on revolving loans or you will lose a significant amount of credit score.  Any time you go below a threshold, you will be gaining significant points and anytime you go up over a threshold you will be losing significant points.  Here are the other thresholds that are important to watch as you are reducing  debt, knowing your credit scores are increasing.  88.78% – 68.72% – 45.91% – 33.37% – 23.69% and 15.89%.

The trick is to stay below 15.89% on all your revolving accounts and keep your credit scores high.

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