Credit Utilization Ratio Explained (US Guide)

Credit utilization is how much of your available revolving credit you’re using. In the US, it’s one of the biggest factors that can move your score up or down.

How to calculate utilization

Utilization is typically calculated as: balance ÷ limit. For example, a $300 balance on a $1,000 limit is 30%.

What’s a “good” utilization?

Lower is usually better. Many borrowers aim to keep utilization under 30%, and often even lower for the strongest profile.

Ways to lower utilization quickly

Pay down balances before your statement closes.
Make multiple smaller payments during the month.
Avoid maxing out any single card.
Request a credit limit increase (if appropriate).

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