What Is the Best Credit Utilization Ratio?

Your credit utilization ratio, also called a utilization rate, is a number that shows the percentage of available credit you're using on your revolving credit accounts, such as credit cards. A lower credit utilization ratio is better for your credit scores, but a little utilization is better than none at all. As a result, the best revolving credit utilization ratio may be 1%. However, you don't need a 1% utilization ratio to have an exceptional credit score. Keeping your utilization in the low single digits could be good enough.

Average Credit Card Utilization in U.S.
	2010	2019	2020	2019-2020 Change
Utilization ratio	27%	29%	25%	-4 percentage points

Source: Experian

How Much Credit Should I Use?

If you're focused on having excellent credit scores, a credit utilization ratio in the single digits is best. So, for example, if your credit limits across all of your credit cards add up to $10,000, keeping your total credit card usage under $1,000 will be best for your scores. If you need to occasionally use more credit to cover your bills or pay for an emergency, however, that's not necessarily bad for your credit in the long run—as long as you pay down the balance as quickly as possible.

Credit utilization is an important credit scoring factor across all the various credit scoring models, but most credit scores only consider the current balances and credit limits on your credit report—it's a snapshot of where you stand when your score is calculated. (If you're unsure about the math, here's a closer look at how to calculate credit card utilization.)

Having a high utilization ratio one month may hurt your score. But once you pay down your balance and your card issuer sends an updated balance to the credit bureaus, your credit utilization goes down as well. As a result, you could quickly see an improvement in your credit scores.

It's also important to understand that credit card companies generally report your account balance around the end of your billing period. As a result, you could have a high utilization ratio even if you pay your bill in full, because the bill usually isn't due until around 21 to 25 days after you receive it.

If you frequently use your credit card to earn rewards or for the purchase protections it offers, you could pay down your balance during the billing period instead of waiting until just before the due date. Your card company will then report the lower current balance to the credit bureaus, which can lead to a lower utilization ratio and better scores.

How to Lower Your Credit Utilization Rate

Your credit utilization ratio is calculated using your credit limits and current balances, which means you can lower your utilization ratio by increasing your available credit or lowering your reported balance.

Pay Down Credit Card Balances

If you're carrying a balance, make an extra effort to pay down your credit card debt. You may also want to stop using your credit cards to limit how much new debt you add to your card's balance.

Request a Credit Line Increase

You can ask your card issuer to increase your credit limit. Card issuers don't have to say yes, and likely won't if you just opened your card or haven't managed your account responsibly. But it's worth asking, particularly if you haven't missed any payments, usually pay more than the minimum due and won't take advantage of the increase by running up your balance. Also, update your income information whenever it rises: Card issuers may proactively raise your credit limit as your income increases, or may be more likely to say yes if you request a credit limit increase.

Open a New Credit Card

Opening a new credit card can also increase your total available credit. That might not be a good enough reason to open a new card, and opening a new card could impact your credit scores in several ways. However, having a few cards can make it easier to maintain a low utilization ratio than if you have only one.

If you decide opening a new card might be a good move, do your research and choose a card you're likely to be approved for before applying. If you apply for multiple credit cards at once, your credit scores could suffer. If you're not sure which credit card might be right for you, you can compare cards you may qualify for using Experian's CreditMatch™ tool.

Keep Your Credit Cards Open

Even if you've stopped using a credit card, keeping the card open increases the amount of available credit you have, which can contribute to a lower utilization ratio. If the card has an annual fee, it might not be worth keeping unless you benefit from the card in other ways. But rather than closing your account, you could call the issuer and ask if you can change to another card the issuer offers without an annual fee.

Use a Loan to Consolidate Credit Card Debt

Credit utilization ratios only consider the balances and limits on revolving credit accounts—credit cards and lines of credit. If you use a personal loan to pay down credit card balances, you're moving the debt from a revolving account to an installment account. The primary motivation for consolidating credit card debt is to lower your interest rate or monthly payment. But now you know why consolidating credit card debt could also help your credit scores.

Check and Monitor Your Credit and Utilization

You can calculate your credit utilization by comparing the current balances and credit limits for revolving accounts on your credit report. Additionally, when you check your credit report with Experian (which you can do for free), your credit utilization ratio will automatically be calculated and displayed. You can also look at each of your accounts to see their current individual utilization ratio. Both overall utilization and individual account utilization are considered in your credit score calculation.

Credit Utilization

How Good Is Your Credit Score?

300 credit score 301 credit score 302 credit score 303 credit score 304 credit score 305 credit score 306 credit score 307 credit score 308 credit score 309 credit score 310 credit score 311 credit score 312 credit score 313 credit score 314 credit score 315 credit score 316 credit score 317 credit score 318 credit score 319 credit score 320 credit score 321 credit score 322 credit score 323 credit score 324 credit score 325 credit score 326 credit score 327 credit score 328 credit score 329 credit score 330 credit score 331 credit score 332 credit score 333 credit score 334 credit score 335 credit score 336 credit score 337 credit score 338 credit score 339 credit score 340 credit score 341 credit score 342 credit score 343 credit score 344 credit score 345 credit score 346 credit score 347 credit score 348 credit score 349 credit score 350 credit score 351 credit score 352 credit score 353 credit score 354 credit score 355 credit score 356 credit score 357 credit score 358 credit score 359 credit score 360 credit score 361 credit score 362 credit score 363 credit score 364 credit score 365 credit score 366 credit score 367 credit score 368 credit score 369 credit score 370 credit score 371 credit score 372 credit score 373 credit score 374 credit score 375 credit score 376 credit score 377 credit score 378 credit score 379 credit score 380 credit score 381 credit score 382 credit score 383 credit score 384 credit score 385 credit score 386 credit score 387 credit score 388 credit score 389 credit score 390 credit score 391 credit score 392 credit score 393 credit score 394 credit score 395 credit score 396 credit score 397 credit score 398 credit score 399 credit score 400 credit score 401 credit score 402 credit score 403 credit score 404 credit score 405 credit score 406 credit score 407 credit score 408 credit score 409 credit score 410 credit score 411 credit score 412 credit score 413 credit score 414 credit score 415 credit score 416 credit score 417 credit score 418 credit score 419 credit score 420 credit score 421 credit score 422 credit score 423 credit score 424 credit score 425 credit score 426 credit score 427 credit score 428 credit score 429 credit score 430 credit score 431 credit score 432 credit score 433 credit score 434 credit score 435 credit score 436 credit score 437 credit score 438 credit score 439 credit score 440 credit score 441 credit score 442 credit score 443 credit score 444 credit score 445 credit score 446 credit score 447 credit score 448 credit score 449 credit score 450 credit score 451 credit score 452 credit score 453 credit score 454 credit score 455 credit score 456 credit score 457 credit score 458 credit score 459 credit score 460 credit score 461 credit score 462 credit score 463 credit score 464 credit score 465 credit score 466 credit score 467 credit score 468 credit score 469 credit score 470 credit score 471 credit score 472 credit score 473 credit score 474 credit score 475 credit score 476 credit score 477 credit score 478 credit score 479 credit score 480 credit score 481 credit score 482 credit score 483 credit score 484 credit score 485 credit score 486 credit score 487 credit score 488 credit score 489 credit score 490 credit score 491 credit score 492 credit score 493 credit score 494 credit score 495 credit score 496 credit score 497 credit score 498 credit score 499 credit score 500 credit score 501 credit score 502 credit score 503 credit score 504 credit score 505 credit score 506 credit score 507 credit score 508 credit score 509 credit score 510 credit score 511 credit score 512 credit score 513 credit score 514 credit score 515 credit score 516 credit score 517 credit score 518 credit score 519 credit score 520 credit score 521 credit score 522 credit score 523 credit score 524 credit score 525 credit score 526 credit score 527 credit score 528 credit score 529 credit score 530 credit score 531 credit score 532 credit score 533 credit score 534 credit score 535 credit score 536 credit score 537 credit score 538 credit score 539 credit score 540 credit score 541 credit score 542 credit score 543 credit score 544 credit score 545 credit score 546 credit score 547 credit score 548 credit score 549 credit score 550 credit score 551 credit score 552 credit score 553 credit score 554 credit score 555 credit score 556 credit score 557 credit score 558 credit score 559 credit score 560 credit score 561 credit score 562 credit score 563 credit score 564 credit score 565 credit score 566 credit score 567 credit score 568 credit score 569 credit score 570 credit score 571 credit score 572 credit score 573 credit score 574 credit score 575 credit score 576 credit score 577 credit score 578 credit score 579 credit score

580 credit score 581 credit score 582 credit score 583 credit score 584 credit score 585 credit score 586 credit score 587 credit score 588 credit score 589 credit score 590 credit score 591 credit score 592 credit score 593 credit score 594 credit score 595 credit score 596 credit score 597 credit score 598 credit score 599 credit score 600 credit score 601 credit score 602 credit score 603 credit score 604 credit score 605 credit score 606 credit score 607 credit score 608 credit score 609 credit score 610 credit score 611 credit score 612 credit score 613 credit score 614 credit score 615 credit score 616 credit score 617 credit score 618 credit score 619 credit score 620 credit score 621 credit score 622 credit score 623 credit score 624 credit score 625 credit score 626 credit score 627 credit score 628 credit score 629 credit score 630 credit score 631 credit score 632 credit score 633 credit score 634 credit score 635 credit score 636 credit score 637 credit score 638 credit score 639 credit score 640 credit score 641 credit score 642 credit score 643 credit score 644 credit score 645 credit score 646 credit score 647 credit score 648 credit score 649 credit score 650 credit score 651 credit score 652 credit score 653 credit score 654 credit score 655 credit score 656 credit score 657 credit score 658 credit score 659 credit score 660 credit score 661 credit score 662 credit score 663 credit score 664 credit score 665 credit score 666 credit score 667 credit score 668 credit score 669 credit score

670 credit score 671 credit score 672 credit score 673 credit score 674 credit score 675 credit score 676 credit score 677 credit score 678 credit score 679 credit score 680 credit score 681 credit score 682 credit score 683 credit score 684 credit score 685 credit score 686 credit score 687 credit score 688 credit score 689 credit score 690 credit score 691 credit score 692 credit score 693 credit score 694 credit score 695 credit score 696 credit score 697 credit score 698 credit score 699 credit score 700 credit score 701 credit score 702 credit score 703 credit score 704 credit score 705 credit score 706 credit score 707 credit score 708 credit score 709 credit score 710 credit score 711 credit score 712 credit score 713 credit score 714 credit score 715 credit score 716 credit score 717 credit score 718 credit score 719 credit score 720 credit score 721 credit score 722 credit score 723 credit score 724 credit score 725 credit score 726 credit score 727 credit score 728 credit score 729 credit score 730 credit score 731 credit score 732 credit score 733 credit score 734 credit score 735 credit score 736 credit score 737 credit score 738 credit score 739 credit score

740 credit score 741 credit score 742 credit score 743 credit score 744 credit score 745 credit score 746 credit score 747 credit score 748 credit score 749 credit score 750 credit score 751 credit score 752 credit score 753 credit score 754 credit score 755 credit score 756 credit score 757 credit score 758 credit score 759 credit score 760 credit score 761 credit score 762 credit score 763 credit score 764 credit score 765 credit score 766 credit score 767 credit score 768 credit score 769 credit score 770 credit score 771 credit score 772 credit score 773 credit score 774 credit score 775 credit score 776 credit score 777 credit score 778 credit score 779 credit score 780 credit score 781 credit score 782 credit score 783 credit score 784 credit score 785 credit score 786 credit score 787 credit score 788 credit score 789 credit score 790 credit score 791 credit score 792 credit score 793 credit score 794 credit score 795 credit score 796 credit score 797 credit score 798 credit score 799 credit score

What Is Open-End Credit?

How Can Student Loans Affect Your Credit?

Why Can’t My Credit Score Be Calculated?

What Is a Thin Credit File?

Will My Canadian Credit History Transfer to the U.S.?

Do You Need a Good Credit Score to Adopt a Child?

The purpose of this question submission tool is to provide general education on credit reporting. The Ask Experian team cannot respond to each question individually. However, if your question is of interest to a wide audience of consumers, the Experian team may include it in a future post and may also share responses in its social media outreach. If you have a question, others likely have the same question, too. By sharing your questions and our answers, we can help others as well.

Personal credit report disputes cannot be submitted through Ask Experian. To dispute information in your personal credit report, simply follow the instructions provided with it. Your personal credit report includes appropriate contact information including a website address, toll-free telephone number and mailing address.

To submit a dispute online visit Experian's Dispute Center. If you have a current copy of your personal credit report, simply enter the report number where indicated, and follow the instructions provided. If you do not have a current personal report, Experian will provide a free copy when you submit the information requested. Additionally, you may obtain a free copy of your report once a week through April 2022 at AnnualCreditReport.

Resources

Credit Score

Credit Report

Fraud & Identity Theft

Life Stages

Improve Credit

Personal Finance

Calculators

What Is the Best Credit Utilization Ratio?

In this article:

How Much Credit Should I Use?

How to Lower Your Credit Utilization Rate

Pay Down Credit Card Balances

Request a Credit Line Increase

Open a New Credit Card

Keep Your Credit Cards Open

Use a Loan to Consolidate Credit Card Debt

Check and Monitor Your Credit and Utilization

What Makes a Good Credit Score?

How Good Is Your Credit Score?

Related Articles:

What Is Open-End Credit?

How Can Student Loans Affect Your Credit?

Why Can’t My Credit Score Be Calculated?

What Is a Thin Credit File?

Will My Canadian Credit History Transfer to the U.S.?

Do You Need a Good Credit Score to Adopt a Child?

Resources

Latest Research

Latest Reviews

Instantly increase your credit scores for free.

Is your information on the Dark Web?

Discover your personalized credit card offers with CreditMatch.

Find help to protect and understand your credit.

Get answers to your credit questions.

In this article:

How Much Credit Should I Use?

How to Lower Your Credit Utilization Rate

Pay Down Credit Card Balances

Request a Credit Line Increase

Open a New Credit Card

Keep Your Credit Cards Open

Use a Loan to Consolidate Credit Card Debt

Check and Monitor Your Credit and Utilization

What Makes a Good Credit Score?

How Good Is Your Credit Score?

Related Articles:

What Is Open-End Credit?

How Can Student Loans Affect Your Credit?

Why Can’t My Credit Score Be Calculated?

What Is a Thin Credit File?

Will My Canadian Credit History Transfer to the U.S.?

Do You Need a Good Credit Score to Adopt a Child?

Resources

Latest Research

Latest Reviews