Financial glossary
Credit Utilization Ratio
In plain English
The percentage of revolving credit currently reported as used, calculated both for each account and across all revolving accounts.
Credit utilization ratio
Credit utilization is the percentage of available revolving credit represented by balances reported to the credit bureaus. For one credit card, divide the reported balance by its credit limit and multiply by 100. A $1,000 reported balance on a $5,000 limit produces 20% utilization.
Overall utilization uses the sum of revolving balances divided by the sum of revolving limits. It is not the simple average of each card’s percentage. Credit scoring systems may consider both the overall ratio and each account individually, so one nearly maxed-out card can matter even when the aggregate ratio is modest.
The balance in a credit report may differ from the live balance in an issuer’s app. Issuers generally report periodically, often around a statement close, and scoring uses the information available when the score is requested.
Thirty percent is commonly cited as a guideline, not a guaranteed cutoff. Lower reported utilization generally indicates less reliance on revolving credit, but no percentage promises approval or a specific score change. Payment history and other credit-file factors still matter.
Use the credit utilization calculator to calculate per-card and overall ratios and estimate the paydown needed for an adjustable planning target.
Related calculators
- Credit Utilization CalculatorCalculate total and per-card credit utilization, then see exactly how much to pay down to reach your target ratio. Private and instant.
- Credit Card Payoff CalculatorSee when your credit card will be paid off with a fixed payment — and what minimum payments would really cost you in years and interest.
- Credit Card Balance Transfer CalculatorCompare a balance transfer with keeping your current card. Include the transfer fee, promo APR, post-promo APR, payoff time, and real savings.