Their score is a crucial component of their financial planning
Dallas, TX (PRWEB) January 01, 2017
National Debt Relief recently discussed in an article published December 14, 2016 why credit utilization is important in determining a person’s credit score. The article titled “Credit Utilization and Why Yours is Such a Big Deal” looks at what makes up credit utilization and shares how critical it is in managing a decent credit score.
The article starts off by pointing out that a consumer needs to have a good idea of the factors that make up their credit score. Their score is a crucial component of their financial planning because it can either be an asset or a liability. It can help them manage interest payments and even insurance premiums.
Considering all the components of a credit score, the article shares that the biggest one is on-time payment of bills. However, people are not aware of the second biggest component used to calculate a person’s score. It is their credit utilization which still baffles quite a few number of people not really knowing what it is.
The article explains that this is simply the ratio that shows the relationship between how much available credit a person has in relation to their balance. The lower the percentage, the better because lenders make a big deal out of this component. A high credit utilization percentage is less attractive to potential lenders because it is interpreted as a high risk for defaulting.
To read the full article, click https://www.nationaldebtrelief.com/credit-utilization-big-deal/