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How Credit Utilization Works
Master the second most important factor in your credit score
What Is Credit Utilization?
Credit utilization is the ratio of your credit card balances to your credit limits. It accounts for 30% of your FICO score.
How to Calculate
Divide your total balances by your total credit limits, then multiply by 100 to get a percentage.
Optimal Utilization Rate
Keep it below 30%. Under 10% is ideal for the best scores.
Per-Card vs Overall
Both individual card utilization and overall utilization matter. Keep each card below 30%.
Tips to Lower Utilization
- Pay down balances
- Request credit limit increases
- Make multiple payments per month
- Use different cards to spread balances