Credit utilization, the share of your credit card limits you’re using, is one of the biggest factors in your credit score. Keep it under 30% on every card and overall, and aim for under 10%. Because issuers usually report your statement balance, pay your cards down a few days before each statement closes.
Utilization is one of the few parts of your score you can change in a single billing cycle. Many scoring models look only at your most recently reported balances, so a lower balance counts as soon as it’s reported.
The math is balances divided by limits. With $10,000 in total card limits, 30% means no more than $3,000 in reported balances, and 10% means $1,000. Scoring models look at each card too, so one card near its limit can drag you down even when your overall number looks fine.
FICO says its data doesn’t show scores dropping the moment you cross 30%, but the Consumer Financial Protection Bureau says experts advise staying at or below it. Lower utilization generally means a higher score, though FICO says a 0% rate can keep you from the maximum points for amounts owed, the part of your score that utilization falls under. Experian’s 2024 data found that people with scores from 800 to 850 averaged 7.1% utilization, which makes 10% the target worth hitting.
Timing is where people who pay in full still get caught. Issuers usually report your balance around the end of each statement period, weeks before the payment is due. A big month of spending can show up as high utilization even if you clear it by the due date. Pay down the balance a few days before the statement closes, and the smaller number is the one the bureaus see.
If your balances run high against your limits, ask your issuer for a higher limit. The request can bring a hard inquiry, a credit check that FICO says takes less than five points off most people’s scores and counts for a year. Keep older cards open too, since closing one removes its limit from your total, but a card with an annual fee costs that fee every year you keep it.
Look up the statement closing date for each card this week and set a payment reminder a few days ahead of each one.
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