Here’s a credit score tip from David Leach of the Maine Bureau of Consumer Credit Protection: Never let the balance on any of your credit cards exceed 30 percent of the limit.

Preferably, keep it lower than 30 percent.

If your card limit is $6,000, when your balance gets to $2,000 or higher, that lowers your credit score, even if you pay off your balance every month, Leach said.

He recommends charging no more than $1,900 for a $6,000 credit card limit.

When it comes to credit scores, the most important determining factor is payment history, Leach said. But the second is amount owed, a fact that surprises many consumers, he said.

Too much charging, even if you’re way below your limit, can lower your score. For example, Leach said a person with a top-notch credit score of 830 on Nov. 21 could find herself with a 712 credit score in January if the amount they charged went from 21 percent of their balance to 45 percent.

A report by NerdWallet, a personal finance website, agreed that exceeding 30 percent in any point of a credit card bill cycle can lower a credit score. NerdWallet recommended strategies to keep credit scores up, including tracking how much you’re charging, or raising the credit card limit, or paying mid-cycle. 

Credit scores are important to everyone. A bad score not only means less access to credit or higher interest costs, it can affect an individual in surprising ways, such as higher auto insurance premiums, Leach said.

Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.

filed under: