The FICO credit scoring model puts a significant amount of emphasis on the ratio of your credit card balances to their limits. If you are enrolled in our credit repair service we will manage the dispute process on your behalf, but if you really want to see your scores improve you should start reducing your revolving balances.
A Huge Effect
Here is some motivation for you. Depending on the overall content of your credit report your revolving balances can swing your credit scores by as much as 150 points. If your balances approach the account limit your scores will plummet. Conversely, if you are able to reduce your balances so that less than 20 percent of the total available credit line is utilized you will see your scores soar and your credit repair effort rewarded.
The Logic
The FICO scoring model recognizes incremental levels of credit card utilization, and each of these levels is rewarded or punished according to its statistical risk level. The logic behind the FICO treatment of your balances is simple; high credit card balances tend to occur when your budget is tight, and low balances tend to occur when money is plentiful. As a tight budget corresponds to increased risk of default, FICO will lower your credit score as a warning to prospective creditors.
Credit Repair Strategy
The good news for anyone in a credit repair program is that there is never any lasting damage done from maxing out your credit cards. As soon as you reduce your balances your scores will recover. Credit cards can be convenient and there is no harm in using them responsibly as long as you are aware of the impact they can have on your credit repair project. Use them as needed, but if you need your credit scores plan on reducing the balances.