Credit Utilization Calculator
Calculate your credit utilization ratio and its impact on your credit score
Your Credit Lines
Credit Utilization Summary
Enter your credit card balances and limits to calculate your utilization ratio
Credit Score Impact Scale
Outstanding credit management - maximizes credit score
Good credit management - positive impact on score
Moderate risk - consider reducing balances
High risk - significantly impacts credit negatively
Very high risk - major negative impact on credit
Credit Utilization Tips
Keep It Low
Aim for under 30%, ideally under 10% for the best credit score
Pay Before Statement
Pay down balances before your statement closes
Increase Limits
Request credit limit increases to lower your ratio
Don't Close Cards
Keep old cards open to maintain your total available credit
Why Track Utilization?
Credit Score Impact
30% of your credit score is based on utilization
Loan Approvals
Lenders check utilization for mortgage and loan decisions
Budget Management
Track spending across all credit lines
Limit Optimization
Determine if you need higher or lower limits
Understanding Credit Utilization
What is Credit Utilization?
Credit utilization is the percentage of your available credit that you're currently using. It's calculated by dividing your total credit card balances by your total credit limits.
Formula:
Credit Utilization = (Total Credit Used ÷ Total Credit Limit) × 100
Example Calculation
Card 1: $1,400 used / $4,000 limit
Card 2: $1,100 used / $4,000 limit
Card 3: $2,500 used / $7,000 limit
Total: $5,000 used / $15,000 limit = 33.3%
Impact on Credit Score
- ✓30% of Credit Score: Utilization is the second most important factor
- ✓Individual & Overall: Both per-card and total utilization matter
- ✓Quick Impact: Changes appear on your credit report within 30 days
- ✓No Memory: Past high utilization doesn't hurt if you improve it
Best Practices
- • Keep overall utilization below 30%
- • Aim for 1-9% for excellent scores
- • Keep individual cards below 30%
- • Pay multiple times per month
- • Request credit limit increases
Calculate Total Balances
Add up balances from all credit cards and lines
Calculate Total Limits
Add up credit limits from all accounts
Divide and Multiply
Divide balances by limits, multiply by 100 for percentage
Frequently Asked Questions
What is a good credit utilization ratio?
Experts recommend keeping your credit utilization below 30% for a good credit score. However, the ideal range is 1-9% for excellent credit scores. Zero utilization may suggest inactivity, while anything above 30% can start negatively affecting your credit score.
Does credit utilization affect my credit score?
Yes, significantly. Credit utilization accounts for approximately 30% of your FICO credit score, making it the second most important factor after payment history (35%). Both your overall utilization across all cards and individual card utilization rates matter to credit scoring models.
How is credit utilization calculated?
Credit utilization is calculated by dividing your total credit card balances by your total credit limits, then multiplying by 100 to get a percentage. For example, if you have $2,000 in balances across cards with a total $10,000 limit, your utilization is 20% ($2,000 ÷ $10,000 × 100 = 20%).
Should I pay off my credit card before the statement closes?
Yes, paying down your balance before your statement closing date is one of the most effective strategies to lower your reported utilization. The balance reported to credit bureaus is typically your statement balance, not your current balance. By paying early, you can ensure a lower utilization rate is reported even if you use the card frequently.
Does closing a credit card hurt my utilization ratio?
Yes, closing a credit card reduces your total available credit, which increases your utilization ratio if you carry balances on other cards. For example, if you have $3,000 in balances and close a card with a $5,000 limit, your available credit decreases, making your utilization percentage higher and potentially lowering your credit score.
Is 0% credit utilization bad?
While 0% utilization isn't necessarily bad, it might indicate to lenders that you're not actively using credit. A small amount of utilization (1-9%) can be better than 0% as it shows you're responsibly using and managing credit. However, 0% is still much better than high utilization rates above 30%.
How quickly can I improve my credit utilization?
Credit utilization changes appear quickly - typically within one billing cycle (30 days). Once you pay down balances and the new, lower balance is reported to credit bureaus, your credit score can improve within a month. This makes utilization one of the fastest ways to boost your credit score.
Should I request a credit limit increase to lower my utilization?
Yes, requesting a credit limit increase can be an effective strategy to lower your utilization ratio without paying down balances. However, be aware that some credit limit increase requests may result in a hard inquiry on your credit report, which could temporarily lower your score. Ask your issuer if it will be a hard or soft inquiry before proceeding.
Does utilization on individual cards matter or just overall utilization?
Both matter. Credit scoring models look at your overall utilization across all cards and the utilization on individual cards. Having one card maxed out (100% utilization) can hurt your score even if your overall utilization is low. Try to keep each individual card below 30% utilization, ideally below 10%.
Do business credit cards count toward personal credit utilization?
It depends. Some business credit cards report to personal credit bureaus while others don't. Cards from major issuers like American Express, Chase, and Capital One typically don't report business card activity to personal credit bureaus unless you default. Check with your card issuer to understand their reporting practices.