One Habit that Restored My Credit Score 100 Points

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After spending several years building a startup, I decided that it was time to get a job. So, I did! Three things happened almost immediately:

1. My income quadrupled
2. My spending tripled
3. My credit score plummeted

For years, I’d maintained a credit score between 750 and 800. So the news came as a shock when Credit Karma began alerting me of freefall. I had no idea what was happening. All I knew was that my credit score had plummeted to 659.

Every month, religiously, I’d pay my credit card statements in full. If anything, I’d have expected my new financial behaviors to increase my credit scores! Thinking that using more credit and paying it back on time would make me more creditworthy. Right?

Needless to say, that logic was utterly unfounded. It took some digging to uncover both the cause and a solution. That said, here’s what I learned.

Credit Utilization Rate

A key metric that goes into calculating a person’s credit score is their credit utilization rate (CUR). CURs get calculated by taking the amount of revolving credit you’re currently using and dividing that by the total amount of revolving credit available to you. So, if you have a $10,000 credit line and rack up…