What Is Credit Utilization?
Credit utilization is the percentage of your available revolving credit (credit cards and lines of credit) that you're currently using. If you have $5,000 in balances and $20,000 in total credit limits, your utilization is 25%.
Why It's Worth 30% of Your Score
Utilization is the second-biggest factor in your FICO score — only payment history (35%) matters more. Lenders view high utilization as a sign of financial stress, meaning you're relying heavily on credit. Low utilization signals you use credit responsibly.
The 30% Rule
Keep your utilization under 30% on each card AND overall. For best results, aim for under 10%. Someone with $1,000 limits who carries $250 balances (25%) will score higher than someone carrying $400 (40%).
How to Lower Your Utilization Fast
- Pay down balances before your statement closing date (when the balance is reported)
- Request a credit limit increase on existing cards (soft inquiry only)
- Open a new card (temporarily adds available credit — but avoid if you have high balances)
- Pay multiple times per month to keep the reported balance low
Per-Card vs Overall Utilization
FICO looks at both your overall utilization AND each individual card. A card maxed at 90% hurts you even if your overall rate is 15%. Keep every card under 30%.
See how CreditRise AI's score simulator shows the projected impact of paying down specific balances before you do it.