What does Balance-to-limit ratio mean?
Balance-to-limit ratio is a term used when trying to calculate a customer’s credit score. The score is calculated by comparing the total credit available to the amount of credit being used by the borrower. The lower this ratio gets, the bigger the customer’s credit score is. If the client has a lot of available credit and very little debt, the better his or her score gets. This ratio is also named a credit utilization ratio.