How to Calculate Your Credit Utilization Ratio

Credit utilization is calculated by dividing the balance by credit limit for each card and for all cards together.
Lindsay KonskoDec 23, 2020

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Your credit utilization ratio is how much you owe on all your revolving accounts, such as credit cards, compared with your total available credit — expressed as a percentage. It's important because it's one of the biggest factors in your credit score.

Experts suggest using of your limits, and less is better. Charging too much on your cards, especially if you  is associated with being a higher credit risk. That’s why running up your cards will lower your score.

You can calculate credit utilization yourself using this formula:

You can also use the credit utilization calculator below to calculate it for you, or sign up for a free weekly credit score update that shows your utilization.

There are two types of credit utilization ratios: per-card and overall.

Per-card utilization measures how much of each card’s you’re using, while overall utilization takes all your cards and their limits into account.

Enter the balance and credit limit for up to three cards in this calculator to see your per-card and overall utilization figures:

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Both per card and overall utilization rates are important. Credit scores can take the ratio into account in both ways — for each card and overall.

Why that’s important to know: If you try to counteract the negative effects of a maxed-out credit card by and keeping its balance at $0, the high utilization ratio on the maxed-out card still may hurt your score.

If you avoid using more than 30% of the credit limit on any one card, the overall usage takes care of itself.

There are strategies you can use to and make sure it stays below the recommended amount. The less of your available credit you use, the better it is for your credit score.

Working toward a  will make it easier for you to qualify for the best rates on loans, insurance policies and other financial products.

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