How you manage your credit now and how you managed it in the past can come back to haunt you, lowering your score. This phenomenon is known as “high credit.” But how does high credit hurt your credit score and what can you do about it?

How High Credit Factors Into Your Credit Score

You’re credit score may seem like a number that is just made up by the credit bureaus simply because there are so many factors used to calculate it. However, when it comes to your FICO score, your payment history is the single most important factor that makes of your credit score and accounts for 35% of your final score. After that, how much you owe versus your credit limit, also known as credit utilization, accounts for 30% of your credit score.

High credit, also known as “high balance” or “original amount” is the highest monthly balance that you have owed on a credit card account or loan during a period of time as determined by a bank. Even if you pay down your credit balances, this high credit can still impact your credit score.

What Can You Do About High Credit on Your Report?

If you believe that high credit is hurting your credit score, you need to find out immediately. Obtain a copy of your credit reports from all three credit bureaus: Equifax, Experian, and TransUnion for free by going to AnnualCreditReport.com. Then you can check the individual credit accounts to see if a high credit amount has been reported.

If you find that your credit limits are incorrectly reported on any of the three credit reports, make sure that you immediately dispute the errors with the credit bureaus. This will stop the high credit from having a negative impact on your credit score.

Avoid High Credit By Keeping Credit Utilization Low

Credit reporting bureau Experian recommends that you keep your credit utilization at under 30%. If you are trying to improve your credit score or are striving for a perfect score, it’s best to keep utilization at less than 10%.

If you want to buy a home, high credit is something that you should pay close attention to. So to improve your credit score, work on lowering your credit utilization and disputing any errors that you find on your credit reports.

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