What is credit card utilization?

Credit card utilization is a metric often used in credit scoring algorithms. It is a consumer's credit card balances divided by their credit card limits. The resulting range of 0%-100% (although it could be higher or lower if you are over limit or have a credit) is a component used by most of the credit scoring models. Generally speaking, the higher your credit card utilization, the lower your credit score. Our credit card utilization article has more of specific details if you would like to dig a bit deeper.

In recent times, credit card utilization has become a popular discussion topic since it is a simple way to impact your credit score. For example, having a single credit card with 100% utilization ("maxxed out") could lower your credit score. Spreading out the balance across multiple cards is an easy change that could help improve your overall credit profile in the eyes of a lender.

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