Credit use has a significant impact on your credit score. Here's why it matters and how you can lessen its impact.
Over the last couple of years, sticky inflation has caused the price of consumer goods to skyrocket. That, in turn, has led many Americans to turn to their credit cards to cover the cost of their basic needs — resulting in an uptick in credit card debt nationwide. For example, in the second quarter of 2024, credit card balances increased by $27 billion compared to the quarter prior, according to the Federal Reserve Bank of New York. That figure is 5.8% higher than it was just one year ago.
It's important to note, though, that credit utilization has no 'memory' in most scoring models. This means that if you lower your utilization, you could see a quick improvement in your score.Need help with your debt? Learn more about the credit card debt relief options available to you here.
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