Credit Utilization Explained
What It Means
Credit utilization is the percentage of your available credit that you are currently using. It is one of the strongest factors in your credit score.
Why It Matters
Higher utilization can lower your score, while keeping it low shows lenders that you use credit responsibly. In practice, aim to stay below 30% of your total available credit.
How to Improve It
Pay down balances before the statement date, ask for higher limits, and keep old accounts open. Small changes can produce meaningful score gains.
Best Practice
If you carry a balance, pay it down as quickly as possible. The lower your utilization, the better your score will look to issuers.