Credit utilization trimming is a strategy used to improve credit scores. What does it involve and what is the recommended approach to avoid hurting credit history?

• A. Close old accounts to reduce utilization.
• B. Increase credit limits across all cards to lower utilization immediately.
• C. Pay down existing balances to reduce utilization while keeping accounts open to preserve credit history and limit.
• D. Transfer all balances to a single new card.

Answer: (C)

Credit utilization is the portion of your available credit that you’re using, and it has a big impact on your score. To trim utilization without harming your credit history, the most reliable move is to pay down existing balances while keeping the accounts open so your total available credit stays high and your history remains intact. By lowering the reported balances across your cards, your utilization ratio improves, and leaving accounts open preserves both the length of your credit history and the total credit limits you have. Closing old accounts or transferring balances to a new card can reduce your available credit or reset account age, which can hurt your score, while simply increasing limits isn’t guaranteed and may involve inquiries or uneven results.