Learn More About Credit Utilization and Your Credit Score

Your credit utilization ratio is a vital part of your credit score. It is the total amount of debt on your revolving credit accounts compared to your total available credit, expressed as a percentage. Here’s what you should know about the various aspects of credit utilization and how to keep it from hurting your score.

Difference Between Per and Total Credit Utilization

Your ratio is made up of both per-card and overall or total credit utilization.

Both are used as factors in your credit score. For FICO, credit utilization accounts for 30 percent of your score. VantageScore, it accounts for 20 percent of your score.

Why Per-Card Utilization Matters

Credit utilization isn’t just about how much credit you’re using overall—it also matters how that balance is spread across your cards. This is called per-card utilization, and it looks at how much of each card’s limit you’re using. Even if your total utilization (the balance across all cards compared to all limits) is low, maxing out or heavily using one card can still hurt your score. That’s because lenders see high usage on a single card as a higher risk signal than balanced, moderate use across multiple cards. 

1. Aim for 30% Total Credit Utilization

If you want your utilization to help your credit score, a good rule of thumb is to keep it below 30 percent. However, if you want to help yourself out, try to keep that number in the single digits. How do you know your ratio? You can use a credit utilization calculator or follow this simple equation: 

1. Add up the credit used on every credit card
2. Add up the credit limits on all of those cards
3. Divide the total credit used by the total credit limit 
4. Multiply that number by 100

2. Focus on 30% Per-Card Utilization

Per-card utilization can affect your score differently by creating “hot spots.” For example, one card at 80–90% utilization may drag your score down, even if your total utilization is under 30%. Credit scoring models tend to reward borrowers who keep both total and individual card balances low and evenly distributed.

Keep it Down

You can keep your total credit utilization low by:

• Making payments on your cards throughout the month, not just at the end of the month.
• Why do this? Because lenders tend to report balances at the end of each month.
• If you pay down each week, you’ll have a better shot at having a lower balance and, thus, a lower utilization.
• You can also call your lender and ask for your limit to be increased as a way to boost your utilization ratio.

Improving Per-Card Utilization

To improve per-card utilization:

• Focus on paying down high-balance cards first, especially those closest to their limits.
• You can also spread purchases across multiple cards instead of loading up one card
• Request credit limit increases (without increasing spending)
• Make mid-cycle payments to lower reported balances.

Small adjustments here can lead to noticeable score gains—sometimes faster than paying down total debt alone.

Do One Thing: Make sure your credit utilization is as low as possible. It’s an easy way to help keep your credit score in good shape.