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30Y FIXED6.85%↑ 0.02·15Y FIXED6.12%↓ 0.01·REFI 30Y6.78%↑ 0.01·HELOC9.20%0.00·JUMBO 30Y7.05%↑ 0.03·HYSA TOP4.85%↓ 0.05·12M CD5.10%0.00·24M CD4.85%↓ 0.02·5Y CD4.40%↑ 0.01·MMA TOP4.65%0.00·AUTO 60M NEW7.10%↓ 0.02·AUTO 60M USED8.45%↑ 0.04·PERSONAL EXC.8.20%0.00·10Y TREASURY4.32%↑ 0.01·30Y FIXED6.85%↑ 0.02·15Y FIXED6.12%↓ 0.01·REFI 30Y6.78%↑ 0.01·HELOC9.20%0.00·JUMBO 30Y7.05%↑ 0.03·HYSA TOP4.85%↓ 0.05·12M CD5.10%0.00·24M CD4.85%↓ 0.02·5Y CD4.40%↑ 0.01·MMA TOP4.65%0.00·AUTO 60M NEW7.10%↓ 0.02·AUTO 60M USED8.45%↑ 0.04·PERSONAL EXC.8.20%0.00·10Y TREASURY4.32%↑ 0.01·
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Glossary term

Credit Utilization

What credit utilization means, why keeping it under 30% matters for your FICO score, and how to calculate it across multiple cards.

What is credit utilization?

Credit utilization is the percentage of your available revolving credit that you are currently using. It is calculated by dividing your total credit card balances by your total credit limits.

Formula: Utilization = Total Balances / Total Credit Limits x 100

Example: You have two credit cards. Card A has a $2,000 limit with a $500 balance. Card B has a $3,000 limit with a $300 balance. Your total balances are $800 and your total limits are $5,000. Your utilization rate is 16%.

Why it matters for your credit score

Credit utilization is one of the two most important factors in your FICO score, making up about 30% of the calculation. Lower utilization signals to lenders that you are not over-relying on credit.

General benchmarks:

  • Under 30%: Considered acceptable by most lenders.
  • Under 10%: Ideal for maximizing your score.
  • 50% or higher: Starts to meaningfully hurt your score.

Per-card utilization also matters

FICO looks at both your overall utilization and the utilization on each individual card. A card maxed at 90% hurts your score even if your overall utilization is 15%. Try to keep each card individually under 30%.

How to improve your utilization

  • Pay down balances before your statement closes (that is when balances are typically reported to bureaus).
  • Request a credit limit increase, which lowers your utilization percentage without requiring you to spend less.
  • Open a new card (carefully), which adds available credit. This also temporarily lowers your score from the hard inquiry, so weigh the tradeoff.

One important note

Utilization is not a permanent scar. It resets every month when new balances are reported. Paying down a high balance can improve your score within one billing cycle.

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