Do You Know What CUR Is And How It Important It Can Be

Dated: 02/22/2019

Views: 358

A Way to Describe Credit Usage....CUR or this cute dogImage title

Your credit utilization ratio is essentially a measurement of how much of your credit you’re actually using. More accurately, how much of your revolving credit you’re using on a regular basis. 

For most people, revolving credit consists primarily of credit cards, but lines of credit are also considered revolving credit. Revolving credit differs from what is called installment credit in that it doesn’t grant you a one-time lump sum of credit the way, say, a $10,000 car loan would. 

With revolving credit, you determine the amount you’ll borrow against your credit limit—and you may keep borrowing against that limit until you hit it, so long as you continue to make consistent, on-time payments of at least the minimum amount due each payment period.

This ability to keep on borrowing and increasing your outstanding balance with revolving credit is why potential lenders are so concerned with your credit utilization ratio. Because you don’t have to re-apply for more credit with revolving credit, it’s easy to get overextended quickly. Your credit utilization ratio measures just how extended you are with an easy-to-understand percentage.

Image title

So in credit basics it's  


Let’s say your revolving credit consists of three separate credit cards with the following credit lines and outstanding balances:

  • CARD #1: $1,000 credit limit; $300 outstanding balance

  • CARD #2: $3,000 credit limit; $500 outstanding balance

  • CARD #3: $2,000 credit limit; $400 outstanding balance

In the above example, the sum of your outstanding balances ($300 + $500 + $400) would be $1,200.

The sum of your credit limits ($1,000 + $3,000 + $2,000) would equal $6,000.Image title

And your credit utilization ratio would be:

 =  .20 or 20%.

So, what’s considered a “good” CUR? From the perspective of potential lenders, the lower your credit utilization ratio, the better. This is because, to them, a low credit utilization ratio suggests a lower risk of you overextending yourself and defaulting on your debt. So logic would dictate that a 0% CUR is optimal, right?

NOPE Image result for nope

It’s better to have a positive, albeit low, credit utilization ratio. In a perfect world it would typically fall within the 1% - 9% range, but if that’s not doable (lower limits), many experts recommend keeping it below 30%.   

Sometime payoff debt isn't your best option. 

Image title


Hit the ground running with this up to date info in hand! Stop by and like my Facebook page for ongoing info as well @smithrealtytampabay

Happy House Hunting

Want to Advertise on this Site?

Latest Blog Posts

Sanford Three Bedroom You Can Buy For Just A 100 Down Payment Hud Home

You read that correctly!  You can buy this home with just a $100.00 down payment!   Great investment opportunity! Are you looking for that perfect affordable home in?

Read More

Foreclosures In Polk County For Sale

This link will live forever and update every 15 minutes.  Make sure you save it!And remember…If you want or need help in any or all of your Orlando real estate and Tampa Bay

Read More

Seminole County Foreclosures For Sale

We're the foreclosure experts of Seminole County. Let us help guide you through the money saving, REO buying process!And remember…If you want or need help in any or all of your Orlando real

Read More

Foreclosure Listings Homes For Sale In Orlando 32817

If you're looking for a great deal on homes that are zoned for Winter Park Schools, take a gander at these foreclosures.And remember…If you want or need help in any or all of your Orlando

Read More