What Is a Credit Utilization Rate?

Quick Answer

Your credit utilization rate is the percentage of available credit that you’re using on your credit cards and other lines of credit. It’s based on the balances that appear in your credit report. In general, a lower utilization rate is best.

A person sitting at a table, holding a mobile phone in one hand and a credit card in the other.

Your credit utilization ratio, sometimes called your credit utilization rate, is the amount of revolving credit you're using divided by the total amount of revolving credit you have available. It's expressed as a percentage, and it can be an important factor in your credit scores.

In general, lower utilization rates can improve your credit scores, which can in turn make it easier to secure additional credit with favorable terms. Learning what impacts your utilization rate and how to maintain a low utilization rate is an important part of managing your credit and finances.

What Factors Into Your Credit Utilization Ratio?

Credit utilization is also sometimes called revolving credit utilization because only your revolving credit accounts are included in the calculations. The specifics depend on the type of credit score, but types of revolving credit accounts include:

The credit utilization calculation depends on the balances and credit limits from your credit report, which may be different from your current credit limits and balances.

How to Calculate Your Credit Utilization

It's important to understand how to calculate utilization rates on your own. It's also fairly straightforward.

  • Find your balances and credit limits from your credit report. When considering your credit utilization, credit scoring models use the account balances and credit limits listed in your credit reports. You should do the same.
  • Add up the revolving accounts' balances and credit limits. You'll use these two sums to find your overall utilization rate.
  • Divide the total balance by the total credit limit and then multiply by 100. The calculation only involves simple addition, division and multiplication—that's all the math involved.

Credit utilization graphic

For example, say you have two credit cards, and each one has a $5,000 credit limit. One card has a $5,000 balance and the other card has a $0 balance. Since your total available credit is $10,000 and your total balance is $5,000, your overall utilization rate is 50%.

Individual Account vs. Total Credit Utilization

Continuing with the example, you can use the same calculation (balance divided by credit limit times 100) to find the per-card utilization. In the example above, one card has 0% utilization, and the other card has 100% utilization.

Credit scoring models may consider the highest utilization rate on a revolving account in addition to your overall utilization rate. Having a card with a very high utilization rate, such as 100%, can hurt your credit score even if your overall utilization is relatively low.

What Is a Good Credit Utilization Rate?

A good utilization rate is a low utilization rate. The average overall credit utilization in the U.S. was 28% in the third quarter (Q3) of 2022, according to Experian data. However, when you look at the average overall credit utilization broken down by credit score group, it's clear that lower is better. Below are average credit utilization ratios by FICO® Score .

Average Credit Utilization by Credit Range
FICO® Score Credit Range Average Credit Utilization Ratio
300-579 (Poor) 82.1%
580-669 (Fair) 56.1%
670-739 (Good) 35.2%
740-799 (Very good) 14.7%
800-850 (Exceptional) 6.5%

Source: Experian data from Q3 2022

While there's no specific point when your utilization rate goes from good to bad, 30% is the point at which it starts to have a more pronounced negative effect on your credit score. As the data above illustrates, those with the highest scores tend to have credit utilization in the low single digits.

Counterintuitively, however, a utilization rate of 0% is actually worse than 1%. That's because credit scoring models need some usage to go off of when calculating your score, and 0% utilization doesn't tell them much about your credit habits. A low utilization rate could indicate you're using your card and repaying your balances responsibly.

How Does Credit Utilization Affect Your Credit Scores?

Revolving credit utilization is an important scoring factor that could affect around 20% to 30% of your credit score depending on the scoring model. However, utilization rates can impact your credit scores in several ways.

  • Overall and per-account utilization can affect credit scores. Your overall utilization rate and the utilization rate of the account with the highest utilization can affect your credit scores.
  • Only the most recently reported numbers affect most credit scores. Many credit scoring models don't look beyond the most recently reported balances and limits in your credit reports. As a result, you might be able to quickly improve those credit scores by lowering your utilization rate.
  • Newer scoring models consider trends in utilization rates. Unlike previous credit scoring models, the latest VantageScore 4.0 and FICO 10 T models consider trended data. This can include your average utilization ratio and credit card balances over time.

The exact impact of a changing utilization rate depends on your current credit score, the type of credit score and what else is in your credit report. But, as mentioned above, a lower utilization rate is generally best for your credit scores.

How to Lower Your Credit Utilization Rates

You can lower your utilization rates by decreasing the balances and increasing the credit limits on the revolving accounts in your credit reports.

One option is to use cash or debit cards instead of credit cards. However, assuming you want to use credit cards to receive their protections, rewards and benefits, here are a few additional ways to lower your credit utilization rates.

  • Pay down credit card balances early. Credit card issuers generally report your account's balance to the credit bureaus at the end of each statement period. They send you the statement at the same time, and your bill is due several weeks later. Because of this timing, you may have a high utilization rate even if you pay your bill in full. But you may be able to lower the reported balance and resulting utilization rate by making credit card payments before the end of each statement period.
  • Ask your card issuers to raise your limits. You may want to request a higher credit limit if you've had the card for a while and made your payments on time. Additionally, consider making a request after your income increases, credit score improves or you pay off other debts. However, credit limit increase requests sometimes lead to a hard inquiry, which might lower your credit scores a little temporarily.
  • Keep your reported income updated. Credit card issuers might increase your card's credit limit when your income rises, but they won't know unless you update your annual income in your online account. You also might be able to report your household's income if you started sharing finances with someone since opening your card.
  • Use an installment loan to consolidate revolving debt. You might be able to use a personal loan consolidate revolving debt or home equity loan to consolidate revolving debt, such as credit card and HELOC debts. In addition to lowering your utilization rates, you might benefit from a fixed interest rate and set repayment period.
  • Open new lines of credit. Getting a new credit card or line of credit increases your overall available credit. Many credit cards also offer intro bonuses and other perks. However, you should avoid opening new accounts solely to increase your available credit.
  • Don't close your credit cards. You may want to close credit cards that have an annual fee or if you tend to overspend. However, keeping credit cards open can help you maintain a lower utilization rate because their credit limits add to your overall available credit.

If you want to maintain a low credit utilization rate without timing your credit card payments, try to estimate how much you spend on credit cards each month. Multiply this by 10 and use that as a target for the available credit you want to have across your revolving accounts. You'll then be able to maintain your average spending while keeping your utilization rate around 10%.


  • Credit card issuers usually report account information, including the current balance and credit limit, to the credit bureaus around the end of each statement period. They may send your monthly statement around the same time, and your minimum balance is due around three weeks later.

  • Closing a credit card can increase your credit utilization rate because it decreases your overall available credit. Keeping the card open might be a better option if you're not worried about overspending. You still might want to close the card if it has an annual fee, but ask the card issuer if you can switch to a card without an annual fee instead.

  • Lower utilization rates are better for your credit scores, and 30% could be better than 50%, 70% or 90%. However, a lower utilization rate might be even better for your credit scores. People in the highest credit score range tend to have utilization rates in the single digits.

  • Many credit scores only consider your current utilization rate based on the most recently reported revolving account balances and credit limits. As a result, a high utilization rate won't haunt you—you may be able to quickly improve your credit scores by lowering your utilization rate. However, some newer credit scoring models consider trends in your utilization over time, so maintaining a low utilization rate may be helpful.

Check and Track Your Credit Utilization

You can access your Experian credit report for free. You can use it to calculate your current utilization rate, track your overall utilization rate over time and look at each revolving account in your credit report to see the per-account utilization. You'll also receive FICO® Score monitoring, which can alert you to significant changes in your credit.

Learn More About Credit Utilization

How Good Is Your Credit Score?

300 credit score301 credit score302 credit score303 credit score304 credit score305 credit score306 credit score307 credit score308 credit score309 credit score310 credit score311 credit score312 credit score313 credit score314 credit score315 credit score316 credit score317 credit score318 credit score319 credit score320 credit score321 credit score322 credit score323 credit score324 credit score325 credit score326 credit score327 credit score328 credit score329 credit score330 credit score331 credit score332 credit score333 credit score334 credit score335 credit score336 credit score337 credit score338 credit score339 credit score340 credit score341 credit score342 credit score343 credit score344 credit score345 credit score346 credit score347 credit score348 credit score349 credit score350 credit score351 credit score352 credit score353 credit score354 credit score355 credit score356 credit score357 credit score358 credit score359 credit score360 credit score361 credit score362 credit score363 credit score364 credit score365 credit score366 credit score367 credit score368 credit score369 credit score370 credit score371 credit score372 credit score373 credit score374 credit score375 credit score376 credit score377 credit score378 credit score379 credit score380 credit score381 credit score382 credit score383 credit score384 credit score385 credit score386 credit score387 credit score388 credit score389 credit score390 credit score391 credit score392 credit score393 credit score394 credit score395 credit score396 credit score397 credit score398 credit score399 credit score400 credit score401 credit score402 credit score403 credit score404 credit score405 credit score406 credit score407 credit score408 credit score409 credit score410 credit score411 credit score412 credit score413 credit score414 credit score415 credit score416 credit score417 credit score418 credit score419 credit score420 credit score421 credit score422 credit score423 credit score424 credit score425 credit score426 credit score427 credit score428 credit score429 credit score430 credit score431 credit score432 credit score433 credit score434 credit score435 credit score436 credit score437 credit score438 credit score439 credit score440 credit score441 credit score442 credit score443 credit score444 credit score445 credit score446 credit score447 credit score448 credit score449 credit score450 credit score451 credit score452 credit score453 credit score454 credit score455 credit score456 credit score457 credit score458 credit score459 credit score460 credit score461 credit score462 credit score463 credit score464 credit score465 credit score466 credit score467 credit score468 credit score469 credit score470 credit score471 credit score472 credit score473 credit score474 credit score475 credit score476 credit score477 credit score478 credit score479 credit score480 credit score481 credit score482 credit score483 credit score484 credit score485 credit score486 credit score487 credit score488 credit score489 credit score490 credit score491 credit score492 credit score493 credit score494 credit score495 credit score496 credit score497 credit score498 credit score499 credit score500 credit score501 credit score502 credit score503 credit score504 credit score505 credit score506 credit score507 credit score508 credit score509 credit score510 credit score511 credit score512 credit score513 credit score514 credit score515 credit score516 credit score517 credit score518 credit score519 credit score520 credit score521 credit score522 credit score523 credit score524 credit score525 credit score526 credit score527 credit score528 credit score529 credit score530 credit score531 credit score532 credit score533 credit score534 credit score535 credit score536 credit score537 credit score538 credit score539 credit score540 credit score541 credit score542 credit score543 credit score544 credit score545 credit score546 credit score547 credit score548 credit score549 credit score550 credit score551 credit score552 credit score553 credit score554 credit score555 credit score556 credit score557 credit score558 credit score559 credit score560 credit score561 credit score562 credit score563 credit score564 credit score565 credit score566 credit score567 credit score568 credit score569 credit score570 credit score571 credit score572 credit score573 credit score574 credit score575 credit score576 credit score577 credit score578 credit score579 credit score