Wednesday, September 23, 2009

Revolving Balances

First, you need to understand what a revolving balance is. A revolving balance is an account that has no set amount borrowed from it, but a credit limit. The account holder can use the money in the account like cash, but he or she must pay it back. Typical examples of revolving credit are credit cards and lines of credit. In determining your credit score, lenders like to see that you keep your revolving credit below seven percent of its credit limit. While many argue that a higher number, most commonly thirty, is the correct number, this is not true. If you pull your own FICO score, it will tell you that high achievers stay below seven percent.

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