What Is Credit Utilization?
The percentage of your available revolving credit you are currently using. Below 30% is healthy.
Definition
Credit utilization is the second-biggest factor in your FICO score (30%), after payment history. It is the ratio of your credit card balances to your total credit limits. Both per-card and overall utilization matter. Conventional wisdom says keep it under 30%, but the highest-FICO consumers run under 10%. Utilization is calculated when card issuers report to the bureaus, which happens on the statement date, not the due date.
Formula
Utilization = Total Card Balances / Total Card Limits × 100
Example
$3,000 across cards with $20,000 in total limits = 15% utilization. Healthy. Same balance on $5,000 in limits = 60%, hurts score.