Utilization is the second-biggest factor in your score — and the one you can change fastest. Here's everything you need to know.
Credit utilization is the percentage of your available revolving credit that you're currently using. If you have a $5,000 limit and a $1,500 balance, your utilization is 30%.
It accounts for about 30% of your FICO score — second only to payment history. Unlike late payments, which can take years to fade, utilization changes as soon as your next statement is issued.
You've probably heard that you should keep utilization below 30%. That's the floor, not the goal. People with exceptional credit (750+) typically have utilization under 10%.
Utilization tiers (rough guidance):
Pay down balances
The most direct method. Even a partial paydown before your statement closes can reduce reported utilization.
Request a credit limit increase
If you have a good payment history with a card, call and ask for a limit increase. This lowers utilization without touching your balance.
Pay before the statement closes
Your utilization is based on the balance reported to bureaus — which is your statement balance. Paying early means a lower balance gets reported.
Spread balances across cards
Per-card utilization also matters. A card maxed at 90% hurts even if your overall utilization is low.
Utilization only applies to revolving credit — credit cards and lines of credit. Installment loans (mortgages, car loans, student loans) are not included in utilization calculations.
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