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In an attempt to avoid home foreclosures and slow down the housing crisis, lenders are trying to lower borrowers’ monthly payments. And, they tend to look at three factors when determining whether you’re a good candidate for a loan or loan modification; your balance-limit ratio, payment history, and account status. And lenders see all this on your credit report and credit score.

Do you know where you stand? Do you know what helps or harms your score?

Let’s say you have a credit card or two. You carry a balance on them, but you make payments on time. This must be helping improve your credit, right? Well, the answer is, maybe.

You see, it depends on the balance you’re carrying. A high balance makes lenders nervous. If you’ve had one late payment or gone over your credit limit…they’re likely to kick up your interest rate and add fees. You, the borrower, are considered riskier; therefore it’s a good idea to keep your balance low on credit cards.


It’s easy to blame the banks for giving consumers exceedingly high credit limits, but we do have some control over the situation by keeping our balances low and paying bills on time. Nobody is perfect. We all make mistakes. But to take back control, we have to do our part.

The Federal Reserve is expected to release rules soon to crack down on some of the more outrageous credit card policies, such as raising rates on existing balances, but some say we need more than that, such as laws reforming the credit industry.

Meanwhile, lenders are now reducing their risk by lowering credit card limits, which increases the percentage of debt that you and I have compared to the amount of credit we have available. This hurts our credit scores, and our credit scores are what lenders use to determine how much credit to offer us and at what rates. There’s a huge snowballing effect.

United Credit Source offers guidance in this difficult time. A dedicated team of credit specialists is on call to help you through the process of raising your credit scores. We want to improve your scores, thereby improving your life and giving you hope. Don’t get frozen by fear or anxiety. Let us help.