A potential home buyer is wondering about her credit card accounts and the effect they may have on her credit score which will be evaluated when she applies for a mortgage loan. At present, she has three accounts with credit limits and balances outstanding as follows: (see photo)

QUESTIONS:

a) How much credit capacity is she currently using?

b) If she cancels account #2 and transfers the balance to account #3, what will be the capacity used now?

c) After the transfer, how much would an increase in the total credit limit have to be in account #3 to restore the total capacity used in all accounts prior to the transfer?

Account(1)(2)(3)Limit$5,00010,00015,000OutstandingBalance$3,4505,4508,450