Credit Utilization
The percentage of your available revolving credit (credit cards, lines of credit) that you're currently using. Calculated by dividing your total credit card balances by your total credit limits. Accounts for 30% of your FICO score. Lower is generally better; keeping utilization below 30% is a common guideline, while below 10% is ideal.
Related guides
- Full credit & FICO® glossary
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- Revolving Credit
A type of credit where you can borrow repeatedly up to a set limit, repay, and borrow again. Credit cards and lines of credit are revolving. Your credit utilization ratio — a major FICO factor — only applies to revolving credit accounts.
- Credit Limit
The maximum amount a lender allows you to borrow on a revolving credit account (credit card or line of credit). Exceeding your credit limit can result in fees and score damage. Higher credit limits (with low balances) improve your credit utilization ratio.
Frequently Asked Questions About Credit Utilization
What does Credit Utilization mean?
The percentage of your available revolving credit (credit cards, lines of credit) that you're currently using. Calculated by dividing your total credit card balances by your total credit limits. Accounts for 30% of your FICO score. Lower is generally better; keeping utilization below 30% is a common guideline, while below 10% is ideal.
Is Credit Utilization important for my FICO® score?
Yes — Credit Utilization is one of the five factors that directly determine your FICO® score. Understanding it helps you make better decisions about your credit.