Credit utilization is the second most important factor in your credit score—right after payment history. This calculator shows your current utilization rate and helps you understand how it affects your creditworthiness.
How This Calculator Works
This calculator analyzes your credit utilization:
- Credit Card Balances: How much you owe on each card
- Credit Limits: Maximum available credit on each card
- Individual Utilization: Balance/limit ratio per card
- Overall Utilization: Total balances / total limits
- Target Analysis: How close you are to optimal levels
The Formula Explained
Utilization Rate = Total Balances / Total Credit Limits Ă— 100
Example: $3,000 balance on $10,000 total credit = 30% utilization
Individual card utilization matters too. Maxing one card hurts your score even if overall utilization is low.
Step-by-Step Example
Sarah's Credit Card Analysis
| Card | Balance | Limit | Utilization |
| Card A | $1,500 | $5,000 | 30% |
| Card B | $200 | $3,000 | 7% |
| Card C | $800 | $2,000 | 40% ⚠️ |
| Total | $2,500 | $10,000 | 25% |
Card C at 40% may hurt Sarah's score even though overall is 25%.
Frequently Asked Questions
What is credit utilization ratio?
Credit utilization is the percentage of available credit you're using. If you have $10,000 in total credit limits and owe $3,000, your utilization is 30%. It's the second most important factor in your credit score, accounting for about 30% of your FICO score.
What is a good credit utilization ratio?
Most experts recommend keeping utilization under 30%—both overall and on individual cards. Under 10% is considered excellent and maximizes credit score benefits. The lowest scorers often keep utilization between 1-9%. Zero utilization (no usage at all) can actually hurt your score slightly.
Can I have too low credit utilization?
Somewhat. 0% utilization (never using credit) shows no activity, which can slightly hurt your score. Aim for 1-10% for optimal scores—enough to show responsible usage without looking overextended. A single small purchase paid in full each month is ideal.
How quickly does utilization affect my credit score?
Very quickly—utilization is not historical. Your score reflects your most recent statement balances. Pay down cards before statement closing dates, and your score can improve within 30 days. Unlike late payments that haunt you for 7 years, utilization has no memory.
Should I close unused credit cards to lower my utilization?
No! Closing cards reduces your total available credit, which increases your utilization ratio. Example: $2,000 balance with $10,000 limits = 20%. Close a $5,000 limit card? Now $2,000 / $5,000 = 40%—double the utilization, worse score.
Does utilization matter if I pay in full monthly?
Yes—utilization is calculated from statement balance, not end-of-billing-period balance. Even if you pay in full, high statement balances hurt your score temporarily. For best results, make payments before your statement closing date to report a low balance.
How can I lower my credit utilization quickly?
Fast strategies: (1) Pay down balances (most direct), (2) Make mid-cycle payments before statement closes, (3) Request credit limit increases (more available credit = lower ratio), (4) Keep old cards open to maintain credit availability, (5) Spread balances across multiple cards.
Does individual card utilization matter?
Yes—FICO considers both overall and per-card utilization. Having one maxed-out card hurts your score even if other cards have zero balances. Keep each card individually under 30% (ideally under 10%). Don't assume that low overall utilization covers high individual card usage.
Key Points to Remember
- Under 30% is good, under 10% is excellent: Keep balances low relative to limits
- Individual cards matter: Don't max out any single card
- Pay before statement closes: Not just before due date
- Don't close old cards: Keeps available credit high
- Utilization has no memory: Today's low balance helps immediately