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What Is Credit Utilization?
Credit utilization is the percentage of available credit you're using — a major factor in your credit score.
The Formula
Utilization (%) = (Total Balances ÷ Total Credit Limits) × 100
What's a Good Ratio?
- Under 10%: Excellent
- 10-30%: Good
- 30-50%: Fair
- Above 50%: Poor
Frequently Asked Questions
Does paying in full still count?
Utilization is often based on the statement balance reported to bureaus, which may show a balance.
Should I close old cards?
Generally not recommended, since it reduces available credit and can raise utilization.
Does this affect score long-term?
It's typically a snapshot factor that can improve relatively quickly.