Hey, What's Your (Credit Score) Number?

Ever see those commercials on television with the band singing about getting a free credit report? Well, they’re playing a tune everyone should be singing.

It’s a good idea to get in the habit of requesting an annual copy of your credit report every year. It’s only been a few years that a law was passed allowing consumers to each year request a free copy from each of the three credit-scoring agencies – TransUnion, Experian and Equifax. Until then, we had to pay to see what these agencies had on us.

Credit cards play a role in how high or low our credit score it.
Credit cards play a role in how high or low our credit score it. | Source

Reviewing your credit report annually can alert you to errors that can bring down your credit score. And your score affects how much interest rate you are charged for credit and can even affect where you live and work.

So what is this magic number consumers need to reach? Financial experts tell us that a score of at least 700 is what we need to strive for; get 760 and we’re in the upper echelon. Below 620 could signal we’re a credit risk.

How do credit cards figure in our scores? Do they hurt us? Do they help us? College students can be particularly vulnerable to credit card debt as they maneuver their way through school on very tight budgets.

Credit cards can play a key role in our credit score. There's a fine line between having enough credit cards and having too many.

There’s nothing wrong with having a credit card if it’s used wisely and paid off promptly. But if you’ve been denied a loan or if you know your score and aren’t happy with it, your credit cards could be working against you.


NEW! Figuring your debt-credit ratio

Let's say you have a credit card with a $5,000 limit and you've racked up $2,500 in charges on it.

$2,500 / $5,000 = a debt-credit ratio of 50%

That's an easy example - 50% is just half. What if you want to get it down to a more manageable (and somewhat 'acceptable') 36%? Or 18%? Multiply your credit limit by the percentage.

Take the percentage figure and stick a decimal point in front of it (36% = .36) Now multiply that number times your credit limit. $5,000 x .36 = $1,800 and $5,000 x .18 = $900. So if you want to get your debt-credit ratio down to 36%, your debt needs to be no more than $1,800.

That's just for one credit card. If you have multiple cards, add up all the balances, then do your calculations as above. That will be the figure you need to strive to reduce your debt to.

Here are some tips to help you raise your credit score

  • Keep your debt-credit ratio as low as possible on all your cards. Below 30% is ideal but absolutely keep it below 50% Your debt-credit ratio is a method lending institutions use to calculate your ability to repay a loan. Your total debt shouldn't exceed a certain percentage of your income, usually 36-42%.
  • If you have a balance of more than 50% on one card, split it between two cards. This improves your credit-debt ratio. But be careful you don’t reach a point where the number of cards you have opened to spread the debt around starts to reflect more poorly on your record than the ratio itself.
  • Once you’ve found a low-interest card you like, keep it. If you have cards with a long history of regular payments, that works for you. Otherwise, pay off and cancel any cards that you haven’t been able to manage well.


The bottom line is the “bottom line” on our credit report can be hurt by our credit cards. All these tricks can only take us so far. In the end, it’s really up to us to develop the self-discipline to manage our credit cards. And that’s something we can only do solo.


How often do you review your credit reports?

  • What's a credit report?
  • I have never checked my credit report.
  • I make it a point to check my credit report annually.
See results without voting

This hub was updated on 10/28/2011 with the addition of the sidebar explaining how to figure your debt-credit ratio.

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Comments 6 comments

Simone Smith profile image

Simone Smith 5 years ago from San Francisco

Thank you for the helpful tips!


Danette Watt profile image

Danette Watt 5 years ago from Illinois Author

Glad you found them useful Simone.


cardelean profile image

cardelean 5 years ago from Michigan

Great tips! Thanks for the info, important things that we should all keep in mind.


Denise Handlon profile image

Denise Handlon 5 years ago from North Carolina

Danette, I'm sooooo glad to read this. I was just thinking of this today and remembering that this is one of my January tasks I do annually to prepare for the year. Great write. I'm voting it 'up'. :)


daskittlez69 profile image

daskittlez69 5 years ago from midwest

I check mine once every year. Thanks for the Hub!


Danette Watt profile image

Danette Watt 5 years ago from Illinois Author

A very good habit to get into, daskittlez69, especially in these times when a good credit rating is so important.

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