Credit utilization is the amount of available credit you are using. Banks and other financial companies use this to see if you are a good candidate for a new loan. Why? It can give an idea of whether or not you might comfortably pay back your loan. If you’re using a lot of your available credit limit, it could indicate you might have trouble taking on (and paying back) a new loan. The general rule of thumb is to keep your credit utilization below 30%, both for each individual credit card and for your credit overall.