There is a great deal of misinformation about how your Debt Ratio (ratio of credit used versus credit available) affects your credit ratings.

For some odd reason, many financial professionals such as loan officers have been guilty of giving misinformation about the optimal debt ratios that should be carried to maximize credit scores.  Below is a table that shows that relative weight given to the credit score (positive or negative) based on information provided by Fair Isaac.

An example of Revolving Debt Utilization ratios and how they affect your scores are shown in the following table:
 

*Debt Utilization Ratio *Effect on Rating **Effect on Credit Score
< 1.0%                        Very Positive                     +7
1.0%– 9.9%                 Very Positive                     +9
10.0%- 24.9%              Positive                            +5
25.0%- 49.9%              Slightly Positive                 +3
50.0%- 74.9%              Slightly Negative                -2
75.0%- 100%               Negative                           -5
> 100%                       Very Negative                    -8

*Estimates based on information published by Fair Isaac Corporation.
**Based on a relative scale of 1-10, with 10 being the most extreme rating either positive or negative.
Having too many open revolving accounts with a zero balance can actually limit a maximum credit score