Credit utilisation is the share of your available credit that you are currently using. If you have a $1,000 limit and a $300 balance, your utilisation is 30%. It is roughly 30% of your FICO score, second only to payment history, and it is the fastest-moving part of your score.
The thresholds that matter
- Under 30% is the standard advice, and it is a reasonable floor.
- Under 10% is where people with the highest scores actually sit.
- Exactly 0% is not optimal. Scoring models want to see you using credit responsibly, not avoiding it entirely. A small reported balance beats none.
The timing detail almost nobody knows
Your issuer reports your balance to the credit bureaus once a month, usually on your statement closing date, not your due date. Whatever balance is sitting there on that day is the number that lands on your credit report.
This means you can pay your card in full every month, never owe a cent of interest, and still show 60% utilisation, purely because your statement closed on a heavy spending day. If you are about to apply for a car loan or an apartment, pay the card down before the statement closes, not after.
Find your closing date: it is printed on your statement and in your account settings. Paying a few days before it closes is the single easiest score improvement available, and it costs nothing.
Per card and overall both count
Scoring models look at your utilisation on each individual card and across all your cards combined. Maxing one card while leaving three empty still hurts, even if your overall figure looks fine.
How to lower it
- Pay before the statement closes. Free, instant, and the effect shows up next reporting cycle.
- Ask for a limit increase. Raising the denominator lowers the ratio. Many issuers allow this online with a soft pull, but confirm it is soft first.
- Do not close old cards. Closing one removes its limit from your total available credit, which raises your utilisation overnight and shortens your credit history.
The short version
- Utilisation is around 30% of your score and changes month to month.
- Aim under 30%, target under 10% if you are about to apply for something.
- Pay before your statement closing date, not the due date.
- Never close your oldest card to tidy up.
Common questions
Is 0% utilization bad?
It is not damaging, but it is usually not optimal either. Scoring models reward demonstrated responsible use, so a small reported balance typically scores slightly better than nothing at all.
How fast does utilization affect my score?
Fast. Unlike payment history, utilisation carries no memory. Lower the balance and your score can move within one reporting cycle, usually a month.
Should I ask for a credit limit increase?
Often yes, since it lowers your ratio without you paying anything down. Confirm the issuer will use a soft inquiry, and do not treat the extra room as money to spend.