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The Impact of Credit Cards on Scores
Released March 2004
The
Experian credit card usage study was based on a
nationwide sampling of three million consumer
profiles.
Findings:
- U.S. consumers have an
average of 3.2 credit cards
- Approximately 46
percent of the U.S. population have at least two
credit cards and approximately 10 percent of the
U.S. population have more than 10 credit cards
- More than 16 percent of
the U.S. population use at least 50 percent of
their available credit
- U.S. consumers who use
at least 50 percent of their available credit
carry an average of 4.6 credit cards
- The national average credit score for those with credit card utilization of at least
50 percent is 631 compared to the overall national average of 678
Tips for consumers on how to better manage their credit cards:
- Make sure you have a
plan to pay down your balance over a manageable
period of time (four to six months) before
putting significant new purchases on that same
card. Keeping your credit card utilization below
50 percent will help your credit score.
- Be aware of all fees
and charges associated with your credit card.
Make sure your monthly payment more than covers
the fees and charges in order to lower your
overall balance.
- It’s a common fallacy
that closing credit cards will always help your
credit rating. Focus more on the amount of
available credit being utilized, making sure you
are not over extending your debt beyond levels
you can manage. Closing good accounts could
actually hurt your credit rating.
- Having available credit
cards in your wallet can be a good way to build
your credit history. They provide a safe and
convenient means of paying for goods and
services and can be useful in case of emergency.
However, be mindful that even though you have
available credit, it doesn’t mean you have to
use it all.
- Due to credit cards being used at physical retail locations as well as for online shopping and phone purchases, there is more opportunity for your credit card number to be used fraudulently. Therefore, you should monitor your credit card usage, charges on your monthly statements, and your overall credit profile on a regular basis. This also helps you keep track of the amount of outstanding debt you have and helps you budget and manage your finances.
For more information about this and other credit score studies, please contact Experian Media Relations at (714) 830-5300.
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