Resource Center

Credit Utilization Calculator

credit_utilization_calculator_3

Your credit utilization ratio is the percentage of available credit you are using, and is an important factor in determining your credit score.

Keeping credit card balances low even when your limits are high (low credit utilization), suggests you know how to use your available credit wisely. Maxing out your credit cards or coming close to your credit limits (high utilization), indicates you might not be financially responsible or under some financial strain. A high rate of credit card utilization makes lenders wonder if you might have trouble taking on (or paying back) a new personal loan.

Aim for keeping your credit utilization ratio below 30%, both for each credit account and for your total credit overall.

To calculate your credit utilization ratio, gather your credit card and revolving loan statements and plug them into this credit calculator tool from our friends at Nerd Wallet.

Credit Utilization Calculator FAQs

Still have questions? Some of these commonly asked questions may provide the answer.

1. How do you calculate credit utilization?

To calculate your credit utilization, simply add up all the balances on your credit cards and their credit limits. Divide the total balance by the total limit. Then multiply this number by 100 to see your credit utilization ratio as a percentage.

2. Can lowering my credit utilization raise my credit score?

Yes, lowering your credit utilization ratio can help increase your credit score. When you reduce your credit card balances or increase your credit card limits, you can expect your credit utilization to decrease and your overall credit score will go up.

3. What is a good credit utilization ratio?

Keeping your credit utilization rate low is important to maintaining a healthy credit score. Generally, a credit utilization ratio below 30% is considered good. Some financial experts are starting to recommend that if you want to maintain an excellent credit score, keeping your credit utilization at or below 10% helps.

How much do you need?

$
Enter up to $40,000
Change Your Money, Change Your Life
Join our monthly newsletter for tools, tips, and insights to improve your financial health.