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Credit utilization calculator

See how much of your total available credit you're actually using.

· Senior Writer
3 min read

How to use the credit utilization calculator

To calculate your credit utilization, you need to provide a couple of key details about your existing credit cards (and any other revolving credit accounts).

For each card you own, enter the credit limit, along with your current balance. (Note: An entry of "0" switches a row off.) The calculator will then use these numbers to determine your total credit utilization.

Interpreting your results

Once you've entered all of your revolving credit account information, you'll be presented with a few key details:

  • Credit utilization: This is your overall credit utilization ratio across all your accounts.

  • Total balances: The total amount of available credit you're currently using.

  • Available credit: How much available credit you have left out of your total available credit.

  • Highest card: The card with the highest credit utilization ratio among all individual accounts.

  • Breakdown of credit utilization by account: A look at the total balance on each of your accounts and the credit utilization ratio for each one.

  • Recommendations: If your utilization ratio is too high on any individual account — or across all of your accounts collectively — the calculator will note where you may need to work on paying down the balance.

What is credit utilization, and why does it matter?

Credit utilization is the percentage of your available revolving credit that you're currently using. It primarily applies to credit cards and other revolving credit accounts — not installment loans.

For example, if you have a credit card with a $10,000 limit and a $2,000 balance, your credit utilization ratio on that card is 20%. You can also calculate your overall utilization by dividing the total balances across your revolving accounts by their combined credit limits.

Credit utilization is an important factor in calculating credit scores, accounting for 30% of your overall score. Your credit utilization for each individual account, as well as total utilization across all accounts, is considered.

What is a good credit utilization ratio?

When it comes to credit utilization, the lower, the better. It's typically recommended that you keep your credit utilization under 30%, although a ratio under 10% is ideal, according to FICO. 

How to improve your credit utilization ratio

If your credit utilization ratio is higher than you'd like, there are steps you can take to reduce it. To improve your credit utilization, you need to either reduce your revolving credit balances or increase your available credit.

Here are some specific strategies you can use: 

  • Pay down credit card balances. One of the best ways to improve your credit utilization is to pay down the balances on credit cards. Prioritize cards with the highest utilization since credit scoring models consider utilization on individual cards as well as your overall ratio.

  • Make payments before your statement closes. Card issuers often report balances around the end of the billing cycle. Paying some or all of your balance before then can reduce the balance that appears on your credit reports.

  • Make multiple payments throughout the month. Instead of waiting until you receive your bill to make a credit card payment, making weekly or biweekly payments can keep your balance lower throughout the month and prevent a large balance from being reported.

  • Request a credit limit increase. A higher limit can lower your utilization without requiring you to pay down your balance. Just be sure a higher limit won't tempt you to take on more debt. And check whether the issuer will perform a hard credit inquiry as part of your request. If so, you may want to request an increase on a different card to avoid a ding to your credit.

  • Keep older credit cards open when practical. Closing a card removes its credit limit from your available revolving credit, which will cause your overall utilization to rise. Of course, keeping a card isn't always worth it if it carries an annual fee or encourages overspending.