When you consider the factors that make up your credit score,
some are easy to understand, and others not so much. It’s easy
to understand why potential creditors would be interested in
your payment history. It tells them how reliably you’ve paid
bills in the past, and helps them predict how likely you’ll be
to repay new debt. And length of credit history tells them how
much experience you have managing credit. However, the
significance of a debt to credit ratio might be harder to grasp.
After all, “ratio” sounds like math, doesn’t it? Actually, it’s
very simple. In terms of your credit report, a debt ratio
basically measures how much of your total available credit
you’re actually using at any given time. Essentially, your goal
is to have a lot more credit available than what you actually
owe. Understanding Your Debt to Credit Ratio Consider this
comparison: Tom has a combined credit limit of $20,000 on four
credit cards. Mary has a total limit of $10,000 on two cards.
Tom carries a balance of about $10,000 o