Credit utilization
Credit utilization is how much of your available credit you're using — your reported balance divided by your credit limit — and it is an important part of the amounts-owed category, which makes up about 30% of a FICO score in FICO's published weights (myFICO).
Why it matters
It's a part of your score you can act on directly: unlike payment history, you can change your reported balance in a single billing cycle, and for FICO 8, the score most widely used by lenders, it has no memory once a lower balance reports.
Example
A $300 balance on a $1,000 limit is 30% utilization; the target we teach is under 10% on each card and overall.
Learn more
Educational only — not financial advice. No guarantees.