The simple math
Credit utilization is your total revolving balances divided by your total revolving limits. If you have $2,000 in balances across cards with $10,000 in limits, your utilization is 20%.
Why it matters
High utilization suggests you may be stretched thin, so scoring models weigh it heavily. It's measured both per-card and overall, which means one maxed-out card can hurt even if your overall ratio looks fine.
Targets to aim for
Under 30% is the common guideline; under 10% is where the strongest profiles tend to live. Utilization has no memory — once you pay balances down, the benefit can show up in the next reporting cycle.
Practical tactics
Pay before the statement closes, ask for limit increases you won't spend, spread purchases across cards and set balance alerts so you're never surprised.
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