Amount Owed on Revolving Accounts is Too High | What to Do

If a lender declined your application or you recently checked your credit score, you might have gotten a factor code with one of two closely related statements.

“The amount owed on revolving accounts is too high,” or “The proportion of balance to credit limits is too high on bank revolving or other revolving accounts.”

The good news is the factor codes are telling you exactly what to do to improve your credit scores: reduce the balances owed.

The bad news is that reducing any kind of debt takes hard work – although consolidating balances into a personal loan could boost your score and make it slightly easier to get out of debt.

When Proportion or Amounts Owed are Too High

Suppose a credit score factor code communicated that the amount owed on revolving accounts is too high. In that case, the chances are that the proportion of balance to credit limits is above the recommended level as well.

A high utilization ratio means that lenders think you are teetering too close to the edge of delinquency and need more wiggle room for financial stability.

Revolving Utilization Ratio = Balances/Limits

Reduce Revolving Balance

Reducing revolving balances that are too high is the one thing all consumers control. You have three approaches to minimize the amount appearing in the numerator of the utilization ratio (balance).

Debt Consolidation

Request a personal loan (Sponsored Link) to pay off credit card debt if a score factor code communicates that the amounts owed on revolving accounts are too high. A personal loan is an installment contract, which is a different account type.

Debt consolidation does not reduce the amount of money owed; it simply restructures the obligation with new terms that credit scoring equations might view more favorably.

  • You satisfy the score factor code: lack of recent installment loan information (if applicable)
  • You borrow money once, not repeatedly, so it is harder to get yourself into trouble
  • Fixed monthly payment retire the debt over a predefined period (1 to 3 years)

Debt Settlement

Do you qualify for debt relief? (Sponsored Link) A debt settlement program is another approach for consumers whose revolving balances are too high. However, this avenue does not help your credit score because it involves purposeful delinquency.

People who owe more than $10,000 on their credit cards while experiencing financial hardship benefit from this alternative. You stop paying creditors and divert the funds into an escrow account to fund a settlement offer.

Banks are more likely to accept your offer when they fear bankruptcy – and they get nothing instead of something.

Pay Down Balances

Paying down balances is the best approach when the amounts owed on revolving accounts are too high. You are not just restricting obligations as with debt consolidation or purposely becoming delinquent as with a settlement program.

However, this avenue requires sacrifice and discipline to follow a simple formula.

  • Stop charging new purchases on your credit card
  • Pay more than the minimum payment every month

Increase Revolving Limits

Increasing your spending limit is another way to respond if a credit score factor is telling you that the proportion of balance to credit limits is too high on bank revolving or other revolving accounts.

In this case, you are boosting the denominator instead of reducing the numerator in the utilization ratio, and you have two ways of accomplishing this objective. However, in both cases, the bank decides whether to grant your request.

  • Increase the credit limit on existing accounts
  • Open brand new accounts to boost cumulate limits

What Does A Revolving Account Mean?

You might need a clear definition before you can address the amount owed on revolving accounts is too high score factor code. A revolving account allows consumers to borrow money repeatedly up to a set limit and features a flexible periodic payment and monthly minimum.

Credit Card

For example, credit cards are the most commonly used type of unsecured revolving account. Most people know that you do not pledge collateral when using a revolving credit card.

  • Borrow money repeatedly by charging expenses to the account when you have open to buy (the balance is less than the preset limit)
  • The preset credit card limit determines how high the balance can grow before the bank begins declining new transactions
  • Flexible payments allow consumers to determine whether to pay the entire balance each month or just the minimum payment
    • Zero-interest charges when paid in full
    • Compound interest when paying the minimum


A Home Equity Line of Credit (HELOC) is a less commonly used type of secured revolving account. The equity in your home provides the collateral for a revolving HELOC account.

  • Borrow money repeatedly during the draw period (usually about ten years)
  • The preset borrowing limit restricts how high the balance can grow
  • Flexible repayment arrangements determine total interest charges
    • Interest-only payments during the draw period (years 1 to 10)
    • Principle and interest payments during the repayment phase (years 11 to 20)