Your credit utilisation ratio is the share of your available credit that you are using. It is one of the biggest factors in most credit scoring models.
Disclaimer: This article is for general educational purposes only and is not financial advice. Card terms, fees and rates vary by issuer and country, so always read the official terms or speak with a qualified adviser before applying.
How to Calculate It
Divide your total card balances by your total credit limits and multiply by 100. For example, a 1,500 balance on 5,000 of limits is 30%.
What Is a Good Ratio?
- Under 30% is commonly recommended.
- Under 10% is often linked with the highest scores.
- Both overall and per-card ratios can matter.
Ways to Lower It
- Pay down balances before the statement closes, since the statement balance is often what gets reported.
- Make more than one payment per month.
- Request a limit increase if you have a good history, but only if you will not spend more.
- Avoid closing unused no-fee cards, which reduces your total limit.
Frequently Asked Questions
Does utilisation have a long-term effect?
In most models it reflects current balances, so lowering it can help fairly quickly.
Is 0% utilisation best?
Not always; showing small, paid-off usage is typically fine.
Conclusion
Keep balances low compared with your limits and your score will usually reflect it.
