Description
Credit utilization — how much of your available credit you’re using — is one of the biggest factors in your credit score. This video explains what it is, what’s considered a good ratio, and how to keep it in a healthy range.
Questions answered in this video:
• What is credit utilization?
• What’s a good credit utilization ratio?
• How does credit utilization affect my credit score?
Key takeaways:
• Credit utilization measures how much of your total available credit you’re currently using
• It’s the second most important credit score factor after payment history
• A utilization rate under 30% is generally recommended; lower is better
• You can lower your utilization by paying down balances, requesting credit limit increases, or spreading purchases across cards
• Utilization is calculated per card and across all cards — both matter
Our mission is to empower our members to make financial progress, one step at a time. We believe progress is a journey made easier with help, so we root our content in trusted sources and independent research to give you the knowledge to reach your goals.
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