![]() ![]() A single month of big spending won’t make a significant impact to your ratio, but try not to make it a habit. A lower number- under 30% is good, and under 7% is ideal-shows that you’re managing your available credit well. For example, if your credit card bill is $800 and your limit is $1,000, your credit utilization ratio is 80%. You can determine the ratio by dividing your total credit card statement balance, by your total credit card limit. Your credit utilization ratio compares how much of your credit card limit you’re using, for each billing cycle. Understand How Much of Your Available Credit You’re Using With a variety of credit cards to choose from, RBC can help you find the one that’s right for you. We also have options for no annual fee cards, travel and even cards with lower interest rates if you carry a balance. For example, cash back cards can help offset the cost of spending, while some rewards cards let you use points to help pay down the balance due each month. ![]() Secondly, choose the benefits that matter most to you. Why? Because spending near or over your limit each month may actually lower your credit score. First, apply for a card with a credit limit above your spending needs. One of the first steps in choosing a credit card is finding one that best fits your budget and spending needs. Apply For a Credit Card That Matches Your Spending Goals Spending within your credit limit and paying your bills on time every single month are just a few ways you can improve your credit score, simply by using your credit card responsibly. If you don’t have a credit score, or it’s lower than you’d like, using a credit card can be a great way to improve or build your credit rating. How to Build or Improve Credit with a Credit Card How to Build or Improve Credit with a Credit Card If you’re an existing RBC Online Banking client, you may be able to check your credit score in online banking. In addition to other factors, a good credit score can help you qualify for better interest rates, increase the likelihood that you’ll be approved for new credit cards or loans, and help you get approved for higher credit limits. ![]() Since your credit score indicates how likely you are to pay your bills, it helps lenders to decide whether or not to lend you money. Understanding how these work will help you build and maintain a strong credit score for the future. It looks at important elements of your credit report, like payment and credit history, the amount of credit you use, and any debt you carry to indicate how likely you are to pay off any money you borrow. It’s a three-digit number that’s often reviewed by banks, credit card companies and lenders to determine how much money they’re willing to lend to you, and at what rate. Simply put, your credit score shows your ability to borrow money and repay it responsibly. And understanding the elements that make up your credit score, why it’s important, and how to build and improve it, can make it easier to secure loans and credit cards now, and in the future. The good news is that there are several ways to build and improve your credit score with a credit card. It’s important to help you get loans, mortgages, and even credit cards. Whether you’re applying for a new credit card, renting an apartment or taking out a mortgage, your credit score is a good indicator of whether you can pay off the amounts you borrow. Using Credit is Important for Your Credit Score ![]()
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