What your high credit card balances are telling lenders

You pay all your bills on time, but your credit score is not as high as it should be or is dropping rapidly.  So what is causing your score to drop?  It could be the high balances you are carrying on your credit cards.  When a bank sees all or most of your credit cards at or very near their limit, it sends up a big red flag to them, because it looks like you are close to begining a downhill slide.  When a consumer starts to max out their cards it is usually from taking money from the card to make their monthly payments.  Depending on how many cards a person has and the limits on those cards, they may be able to do this for a couple months or several months, but it will eventually come to a screeching halt when the money runs out. 

If this is starting to happen with you, it may be time to buckle down, create a budget, and stick to it.  A good place to start is by taking a notepad with you and writing down everything you purchase throughout the day over the course of a week, that way you can see where you money is really going.  I know this isn’t exactly convenient, but it is the best way to find out where you money is being spent and where you will be able to cut back.  You may find that you are eating out two to three times a day, if you brown bag just one of those meals you may save in excess of $100 a month.  Another way to save a fews buck is by combining multiple trips to stores down to a couple, with current gas prices this could save you a significant amout of money.  While the before mentioned ideas won’t cut your monthly out go by thousands, in could very easily save you a couple hundred dollars a month, which may be the difference in paying your bills when money is tight.