Money Basics
Credit Utilization Explained
Credit utilization is the percentage of your available credit that you are using right now.
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Basic formula
Take your card balance and divide it by your credit limit. For example, a 300 balance on a 1000 limit is 30 percent utilization.
Why people talk about 30 percent
Lower utilization is usually better for your score. Many people try to stay under 30 percent, and even lower can be better.
High utilization warning
If you use most of your available credit, it can make you look riskier to lenders and may lower your score.
Quick improvement idea
Paying balances down before the statement closing date can help your reported utilization.
Related tools & recommendations
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