Get Your Credit Under Your Control – Ep 25

When was the last time you checked your credit score?

There are times in our lives when it’s all too easy to ignore our credit. Often, this happens when we’re in a long-term relationship and how we pay our expenses—housing, vehicle, utilities—hasn’t shifted in years.

But life changes quickly. Maybe the relationship ends, or you or your partner’s financial situation is suddenly very different. Or maybe you’ve always had roommates but now you’re striking out on your own. When things like this happen, many of us are faced with a rude awakening: if our credit score sucks, and we aren’t eligible for…anything.

Everyone needs to have good credit

I know about this situation not just because I run an accounting firm—I’ve experienced it firsthand. When my husband and I suddenly separated six years ago, I realized my credit score was frighteningly low. This wasn’t because I’d failed to pay my bills or anything; we had simply put all our loans, bills, and credit cards in my husband’s name, like so many couples do!

Start building your own credit

Tune in to this week’s podcast episode to hear about my own journey of building up my credit, from figuring out utilities, to getting a low-limit credit card, to ramping up my credit score. It’s all practical, actionable, and pretty personal. 😊

Right now, though, I want to share how to suss out your credit utilization. It involves some math, so we’ll work through it step by step, together!

Figure out your credit utilization

Ok, bear with me here. Sure, it’s math, but don’t worry—I have a worksheet for this, too. 😉

Your credit utilization is the percentage of your credit limit that is unpaid on your payment due date. To get the best credit score bang for your buck, you want to aim for 23%. A credit utilization of 49% is the second best option, and anything over 75% will hurt your credit. Let me clarify with real numbers:

Let’s say you have a credit limit of $1000. For the best result, you want to make sure no more than $230 (23% of 1000) is on your card on your payment due date. This doesn’t mean you can never put more than $230 on your card, it just means you’ll want to pay off everything up to $230 (plus any interest) three or four days before your due date. In other words, if your due date is March 15th and you have $530 on your card, you’ll want to pay off at least $300 around the 11th.

So, first you need to know your current credit utilization. You do this by dividing your current balance by your credit limit. For example:

Credit limit: $1000 divided by
Current balance: $550
Current credit utilization= 55%

Make the necessary adjustments

If you’re over 75% ($750 in this example), aim to get it between 50 and 75% over the next few months. If you’re between 49 and 75%, aim for just under 49%. And if you’re between 23 and 49%, shoot to whittle it down to 23%.

Remember, this doesn’t have anything to do with what you spend—it’s all about how and when you’re paying off your credit card. If you get to work on this now, you should start seeing the benefit to your credit in the coming months. And trust me: watching that upward trend feels amazing.

Help you help yourself!

One thing that really fueled my credit-building success was the weekly money date I set with myself, where I made sure I was in the know for all things My Money. I want to share my free Money Date workbook with you. Then there’s my debt reduction and credit utilization spreadsheet, which can help you with this number crunching. If you need more help, book a date with us at Alchemy Accounting.

I have even more advice and tips to offer in this podcast episode. Tune in and start really getting a handle on your finances because you matter, your dreams matter, and your credit matters!


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