A single credit card over 80% usage is considered MAXED OUT
This can cause your credit score to drop 80+ points
Even a card with a $300 limit and a $240 balance is considered 80% MAXED OUT
Carrying ZERO balance and keeping the card on AutoPay is the easy way to avoid this penalty
Below are two examples of maxed out cards and the quick recovery after paying the balance in full
This penalty can go away fast
Carrying ZERO balance and keeping the card on AutoPay is the easy way to avoid this penalty
Paying the card down 20% can make most of the penalty go away fast
Example: Card with a $300 limit and a $290 balance, paying $150 on the card will gain back about 75% of the points
If you have a large balance in the thousands of dollars, schedule a 1on1 with your Rental Kharma mentor to discuss a plan
Maxing out more than one card
Yes this can compound the penalty and depress your score even more
You're better off to have 1 card with a higher limit than many cards with low limitsThis can prevent multiple penalties for what is the same life event
This graph show you how over usage can bring down your credit score
