What is Credit Utilization Ratio?
Credit Card Glossary · Updated April 2026
The percentage of your available credit that you're currently using. Calculated by dividing your total credit card balances by your total credit limits. Keeping utilization below 30% (ideally under 10%) is recommended for a healthy credit score. It's the second most important factor in your FICO score.
Frequently asked questions
What is Credit Utilization Ratio?⌄
The percentage of your available credit that you're currently using.
What does Credit Utilization Ratio mean on a credit card?⌄
The percentage of your available credit that you're currently using. Calculated by dividing your total credit card balances by your total credit limits. Keeping utilization below 30% (ideally under 10%) is recommended for a healthy credit score. It's the second most important factor in your FICO score.
What terms are related to Credit Utilization Ratio?⌄
Closely related concepts include Credit Limit, Credit Score. Each of these helps clarify different aspects of the same topic.
Where does Credit Utilization Ratio apply?⌄
Credit Utilization Ratio is a credit score concept. It typically appears in the context of credit bureaus, FICO scoring, and credit-building.
More credit score terms
Full glossary
Browse all 90 credit card terms