In this episode, we discussed a tip on how to get the most out of your credit card while keeping your score nice and high. Credit scores matter not only in matters of mortgages, but also in insurance quotes and, well, anything insurance-related.

What makes up your credit score?

So, there are five pieces that really makeup and influence your credit score.

• 30% is the amount owed or utilization
• 15% is the length of credit history
• 10% is new credit
• 10% is credit type
• 35% is payment history

Today we’re just going to focus on the first one which is the easiest one for you as a borrower to control.

Amount owed or utilization

This is pretty straight forward. For example, say your credit card has a thousand-dollar line of credit. If your utilization, the amount you owe, is $300 on a credit report, that’s a 30% utilization rate. So, the best scores come when the balances are below 10% in fact, and really below 1% would be ideal.

So, even if you have a large line of credit try your best to keep your utilization rate below 30%. This is a piece of the credit score pie that you can control on a month to month basis.

As always, be sure to pay off your card before the end of your billing cycle (not everyone’s is at the end of the month). You don’t need to worry about making a payment too big. Your credit card company will credit on there for you and it will just go toward your account.

If you have any questions about this or if you have any questions you’d like us to answer on our podcast, you can email your questions to team@azmortgagebrothers.com or give us a call at (602) 535-2171. Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.

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Thanks for listening and reading the Mortgage Brothers Show. Let us know if you have any questions you’d like us to answer on this podcast. You can email your questions to Tom@AZMortgageBrothers.com or Eddie@AZMortgageBrothers.com.

Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.

Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans NMLS 1007154, NMLS #210917 and 1618695. Equal housing lender.

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