The credit card companies, as well as the banks. They generally grant more cards and larger credit limits to customers who make regular payments, including those who only pay the monthly minimum. The high interest rates charged by most credit card companies are usually considerably higher than those imposed by banks for traditional loans. Although they maintain the balance, interest continues to accumulate, and consumers tend to have larger balances due to compound interest. The monthly minimum may not be enough to reduce the principal debt and, over time, you will pay for the purchase much more than what you would pay making a single payment. When you apply for a loan the banks will check if the principal of the debt is being reduced or if you are only able to pay the monthly minimum.
The period of time that you have owned a credit card, your payment history, and the interest rate, and how many credit cards you have in total, are factors that banks will consider when you apply for a loan. Banks prefer to see a credit ratio of less than 30% and, definitely below 50%. But, they also check for signs of danger, such as when they see many new credit requests or that you have accumulated a lot of debt on numerous credit cards. It is best to keep only 2 or 3 credit cards, a history of regular payments, and low balances. For example, having two credit cards at 30% of the total balance, instead of just one at 60%, can help you improve your credit rating (as long as the total credit you keep on both cards is greater than the amount available on the credit card. the first with a balance of 60%).
The type of debt you maintain also affects your credit rating
The payment history, the total balance, the number of student loans, housing loans, lines of credit, car loans, everything will have an impact on your credit rating. Banks want to see periodic payments with decreasing balances. They also want to know that customers are financially proficient, perhaps by choosing to use a line of credit or a personal loan to pay the high interest on their credit card. When choosing this option, always make sure to cancel the credit cards to reduce the risk of doubling the total debt.
A stable and periodic income assures the lender that you will be able to make the required payments on time. Each lender will have different debt and income ratios to decide if your case is a risky credit and if you will be able to afford the debt. This ratio can also affect the level of interest, a higher risk means that the lenders demand a higher interest payment. Your total credit rating, payment history, available credit are also factors taken into account in calculating the level of interest.
There are good ways that your debt affects your credit rating, including having different types of credit
If you currently only have one credit card debt, add a mortgage or a loan to improve your home, your credit rating will increase. A warning on this, borrow only what you need, it is wiser to wait and persevere than to allow a natural growth of your credit and borrow to increase your credit rating.