Meaning Debt-to-limit ratio
What does Debt-to-limit ratio mean? Here you find 2 meanings of the word Debt-to-limit ratio. You can also add a definition of Debt-to-limit ratio yourself
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Debt-to-limit ratioA debt-to-limit ratio is used in the calculation of credit scores. It compares the amount of credit being used to the total credit available to the borrower. Having a low ratio -- in other words, not much debt but a lot of available credit -- is good for your credit score. Also known as a balance-to-limit ratio and credit utilization ratio.
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Debt-to-limit ratioThe debt-to-limit ratio is a comparison of an individual’s credit card balance and the credit limits. The lower the ratio the better, meaning that there is little debt but a good deal of credit, is helpful for a credit score.
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