Credit Utilization Calculator
Calculate your credit utilization ratio to understand its impact on your credit score and learn what constitutes ideal utilization for building strong credit.
Your Credit Cards
Add each of your credit cards below. Your credit utilization calculator will measure your overall credit utilization ratio across all cards.
| Card Name | Credit Limit ($) | Current Balance ($) |
|---|
Per-Card Utilization
Credit Score Impact
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Ideal Utilization
Recommended Range: Under 30%
Most experts recommend keeping your credit utilization ratio below 30% for good credit health. For excellent credit scores, aim for 1-9% utilization. This shows lenders you use credit responsibly without relying on it heavily.
Pro tip: Paying down balances before your statement closes can lower the utilization reported to credit bureaus, even if you pay in full each month.
What You Can Do
Understanding Credit Utilization
💳 What is Credit Utilization Ratio?
Your credit utilization ratio 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. This ratio is one of the most important factors affecting your credit score.
📈 Why It Matters More Than Total Debt
Credit scoring models focus on the ratio, not the absolute dollar amount. Owing $500 on a $1,000 limit (50% utilization) hurts your score more than owing $2,000 on a $10,000 limit (20% utilization), even though the debt is higher in the second scenario.
📅 Statement Date vs Due Date
Your credit card reports your balance to credit bureaus on your statement closing date, not your due date. Paying down balances before the statement closes can lower your reported credit score utilization, even if you pay your full balance every month.
⚠️ Why Closing Cards Can Hurt
Closing a credit card reduces your total available credit, which can increase your utilization ratio even if your balances stay the same. Before closing any card, consider how it will affect your overall credit utilization.
Frequently Asked Questions
What is a good credit utilization ratio?
A good credit utilization ratio is generally under 30%. However, for the best credit scores, experts recommend keeping utilization between 1-9%. Lower utilization demonstrates responsible credit management to lenders.
Does 0% utilization help your credit score?
While 0% utilization is not harmful, having 1-9% utilization typically shows active, responsible credit use and may be viewed more favorably than complete inactivity. Using your cards occasionally and paying them off demonstrates good credit habits.
How quickly does lowering utilization improve my score?
Changes to your credit utilization ratio typically appear on your credit report within 1-2 billing cycles after your card issuer reports the new balance. Credit score improvements can happen as soon as the lower utilization is reflected in your report.
Should I calculate utilization per card or overall?
Both matter! Credit scoring models look at your overall utilization across all cards and the utilization on each individual card. It's best to keep both your overall ratio and individual card ratios below 30%.
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