Credit & Debt · 7 min
Credit Utilization
The ratio between what you owe and what you are allowed to borrow.
Utilization is your reported balance divided by your credit limit. Carrying $900 on a $1,000 limit reports as 90% utilization, which reads as strain.
Utilization is measured on each account and across all accounts. It also updates monthly, which makes it one of the more responsive parts of a credit file.
Paying before the statement closes — not just before the due date — changes what gets reported.
Key takeaways
- Utilization = balance ÷ limit.
- Measured per card and overall.
- Statement date, not due date, sets the reported figure.
Knowledge check
A $300 balance on a $1,500 limit reports which utilization?
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