What Is a Good Credit Utilization Ratio? (And How to Fix Yours)

What it is

Credit utilization is the percentage of your available revolving credit you're using at any moment:

[ \text{Utilization} = \frac{\text{Statement balance}}{\text{Total credit limit}} \times 100 ]

It's the second-biggest factor in FICO scores (~30% of the score), just behind payment history.

The 30% rule is misleading

Popular advice says "keep it under 30%". The real data:

• 1–9% — Optimal for top scores.
• 10–29% — Still good, minor drag.
• 30–49% — Meaningful hit (~30–50 points).
• 50%+ — Significant damage.
• 90%+ — Severe damage, algorithmic flag.

If you're chasing an 800+ score, 30% is too high.

What score reports actually see

Your utilization is measured at your statement date — not your due date. So even if you pay in full by the 25th, if your statement cuts on the 5th with a $2,000 balance on a$5,000 limit, the bureaus see 40%.

Three tactics to drop it fast

1. Pay before the statement date. Make an extra payment a few days before your statement cuts. The reported balance drops even if you use the card normally after.
2. Request a credit limit increase. Most issuers approve online in 30 seconds. A $5,000 →$8,000 bump on a $2,000 balance drops utilization from 40% → 25%.
3. Spread balances across cards. Two cards at 40% each look better than one card at 80% and one at 0% — per-card utilization matters too.

Per-card vs total

FICO looks at both:

• Aggregate utilization across all revolving accounts.
• Highest single-card utilization.

Maxing out one card while keeping others at zero can hurt more than spreading balances evenly.

The fastest fix of all

If you're carrying balances month to month, utilization is a symptom — not the disease. Use the credit card payoff calculator to build an actual payoff plan, or check whether a balance transfer saves you enough to be worth the transfer fee.