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Debt To Credit Ratio

Definition
The amount of debt owed on revolving lines of credit relative to the total amount of all available credit limits on all revolving accounts. This ratio is used as one factor in determining a consumer's FICO score. Lenders assume that borrowers with a lower debt to credit ratio are more likely to be using credit responsibly and less likely to default. A debt to credit ratio below 30% is considered good.

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