# Basic credit score question

**URL:** <https://boards.straightdope.com/t/basic-credit-score-question/427199>\
**Category:** Factual Questions\
**Created:** [November 20, 2007, 5:05pm UTC](https://boards.straightdope.com/t/basic-credit-score-question/427199 "2007-11-20T17:05:35Z")\
**Posts on this page:** 4\
**Page:** 1

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**Author:** ![happywaffle](https://avatars.discourse-cdn.com/v4/letter/h/ee59a6/32.png) [@happywaffle](https://boards.straightdope.com/u/happywaffle)\
**Post date:** [November 20, 2007, 5:05pm UTC](https://boards.straightdope.com/t/basic-credit-score-question/427199/1 "2007-11-20T17:05:35Z")

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Good mornin’,

My wife and I have over $10k in credit card debt (thank you, [honeymoon](http://happywaffle.wordpress.com)) but we’re paying it off quickly. In 3-4 months, we’ll be below $5k (and down to zero within a year, if all goes well). On top of that we’ve got a mortgage and a car loan (both almost-new).

My basic question is about refinancing that car loan. Is it gonna work out better for me to wait until the total CC debt is below $5k before I apply to refinance? Should I wait until it’s zero? My rudimentary knowledge suggests that there’s some kind of “sweet spot” where I shouldn’t have no credit card debt, but I also shouldn’t be 2/3 on my way to maxed out. But, I don’t _really_ know.

Any thoughts?

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**Author:** ![Santo\_Rugger](https://avatars.discourse-cdn.com/v4/letter/s/e95f7d/32.png) [@Santo\_Rugger](https://boards.straightdope.com/u/Santo_Rugger)\
**Post date:** [November 20, 2007, 5:54pm UTC](https://boards.straightdope.com/t/basic-credit-score-question/427199/2 "2007-11-20T17:54:06Z")

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**olivesmarch4th** has said that 2-9% of your available credit is not detrimental to the “available debt” part of your credit score.

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**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\
**Post date:** [November 20, 2007, 5:55pm UTC](https://boards.straightdope.com/t/basic-credit-score-question/427199/3 "2007-11-20T17:55:36Z")

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Your utilization ratio (outstanding balance to credit limit) is a factor in your credit score. A high ratio (maxed out cards) is bad. A tiny ratio (high credit limit but little balance) is better. A low-to-mid ratio is best.

Note that what’s good for your credit score isn’t necessarily what’s best for your financial health. The credit score measures the risk associated with lending to you – and that does not correlate exactly with financial propriety. But the more important point is this: A small change in your revolving credit utilization ratio will not affect you in any appreciable way when it comes to getting or refinancing a car loan.

So pay off the cards and be happy.

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**Author:** ![Philster](https://avatars.discourse-cdn.com/v4/letter/p/13edae/32.png) [@Philster](https://boards.straightdope.com/u/Philster)\
**Post date:** [November 20, 2007, 5:56pm UTC](https://boards.straightdope.com/t/basic-credit-score-question/427199/4 "2007-11-20T17:56:09Z")

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Refi now.