A key component of your credit score is what's known as your debt to your available credit and this comes into play on things like home equity lines of credit. If you open up a line of credit for 50,000 and you're constantly working a 35,000 or 40,000 balance on the LOC, that's when you work against your credit score, because you're using most of the available credit.
More Quotes from Greg McBride:
What we're seeing here is a growth in the punitive type of fees. The fees are really going to get you if you step outside the bounds set by financial institutions.Greg McBride
Consumer banking experts don't expect that to be a concern with the marriage of J. P. Morgan Chase and Bank One. There's very little geographic overlap in these two institutions, ... The only area where they both have significant market share is in Texas.
Greg McBride
The things you need to do remain the same. You have to pay your bills on time and keep your debt level under control, regardless of who's keeping score.
Greg McBride
Keep that line of credit open for at least the first few years, otherwise you may face a penalty or have to pay closing costs that the lender originally paid when you took out the loan.
Greg McBride
Banks have embraced consumer banking and really want to attract that business. They're starting to realize there's a fine line between generating fee income and alienating customers.
Greg McBride
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