The debt reduction and limit increase are two good approaches to making a positive impact on your credit score.
What the debt reduction means is to lower the expenses you make on your credit cards to a maximum of 20 percent.
This will definitely add points to your total as it has surely worked for me and still is.
The other method is to request a limit increase from your creditor.
For you to qualify for an increase in the total allowed you in a month, your creditor will naturally assess your eligibility using your debt ratio.
So you see, there's no escaping it.
You still need to exercise some measure of control on the amount you spend in a month on your cards.
But how do you know the formula used to calculate your debt-to-credit ratio? Easy.
What Experian, Transunion, and Equifax do to arrive at your ratio is to divide the amount you spend on your cards by the total given to you by your creditor for a particular month.
If, for example, the total that your lender has placed on your card for the month of July is $12,000 and you make expenses totaling $5,973, then your ratio will be calculated thus: $5,973/$12,000=49%.
A 49% ratio is not bad being that it is less than half of your total credit limit.
Your credit score will be depleted and your chances will be slim when you need to borrow money from financial institutions.
In any case, you should consider raising your score using these techniques I have explained here and also take steps to fix any bad details on your report by using a self-help repair method or applying for a makeover with a professional credit repair agency.