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Debt-to-Available-Credit Ratio
Explanation:
The ratio of the sum of all your credit card balances relative to the sum of the credit lines of your credit cards.
For example, if you had 2 credit cards and each one had a credit line of $100 and a balance of $50 then your Debt-to-Available-Credit Ratio would be ($50+$50) / ($100+$100) = 50%
Our Thoughts:
Your Debt-to-Available-Credit Ratio is an important variable in determining how good is your credit. If you are "maxed out" on all your credit cards then it shows to your lenders that you might be desperate for credit.
Our own rule of thumb is that you should try to maintain it below 60% (unfortunately we do not have any data to back up our rule of thumb).