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I’m a recent college grad and have around $ 5,000 in credit card debt across 4 cards. I’m near the limits on 3 and about half way on the 4th.

I recently found my credit score to be low 600s. If I pay this debt down to about 40%, will my score improve quite a bit?


5 Thoughts on Does my debt to limit ratio significantly impact my credit score?
  1. Reply
    November 29, 2011 at 12:38 pm

    First try to bring all debt to 50%. That will improve your score.
    Next step is to get to 32% to 41% range.
    Last step is to eliminate completely and remain debt free.
    Depending upon your personality you can select to pay down the card with high interest first or pay down the card with low balance or pay down the card with high ratio of minimum payment to balance.

  2. Reply
    November 29, 2011 at 1:19 pm

    This is 30% of your score. So if you work on this maybe half of that will improve. So expect 10 – 15% rise in six months or so by just working on this component of your credit score alone.

  3. Reply
    November 29, 2011 at 1:41 pm

    Your problem may be due to limited credit history (how long have you had the cards), late payments (don’t be late).

    Your debt to income ratio is a tool used by those who you have requested credit in order for them to determine whether or not you are capable of paying an additional debt.

    Paying down your cards will increase your debt to income ratio but so will additional income (second job, personal business, etc.)

    Your credit score is based on the amount of credit you have, the time that your credit has been reported and whether or not your payments are made on time.

    Pull your report at for free, that is if you haven’t pulled your report at this site this year.

    Good luck.

    PS please make wise decisions when it comes to credit. A credit card should only be used for emergencies and not cash. Please get that debt down before you consider additional credit.

    Let your first investment be the purchase of a new home (including condo’s, coops, and single family homes). This purchase will send your credit through the roof.

    Credit cards with the high interest rates will eventually make you miserable and destroy your credit.

  4. Reply
    November 29, 2011 at 1:47 pm

    Yes your debt to income ratio does impact your credit score, so paying down the cards that are nearly maxed out will help. It’s not instantaneous, it will take a few months.

  5. Reply
    November 29, 2011 at 1:52 pm

    The fact is that 30% of your score is determined by your debt/credit ratio… much debt you owe compared to your available credit limits.

    Once this number gets over 30% your score will drop. You need to pay off off your credit cards to at least this point. At 40% you will still be hurting your score.

    If you need accurate info on how your score is put together, go to the source! is the folks who developed the FICO scoring system, and they have a lot of educational info on how to improve your score.

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