Credit Utilization Calculator | Calculate Your Credit Utilization Ratio


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When you request a credit card, you’ll constantly hear about how important it is to keep your credit usage rate down to maintain a decent credit score. Credit usage, often known as amounts due, is the proportion of your entire credit that you are utilizing. This credit utilization calculator will help you.

The second most essential aspect in determining your credit score is your credit use. As a result, it’s critical to understand all you can about keeping a healthy ratio. Thus, we have made this post on How to Calculate Your Credit Utilization Ratio.

Keep your credit usage below 30% as a basic rule of thumb. However, according to FICO research, “high performers” (those with credit scores of 750 or higher) utilize just under 10% of their overall credit limit. To prevent harming your credit score, you should try to maintain your credit usage rate as low as feasible but not as low as 0%.

Credit utilization is also an essential aspect of your credit well-being. This percentage indicates how much of your credit is being utilized. Credit use, as well as the amount of debt you have, affects your credit score. It accounts for 30% of your fico score and is the second most significant component determining your credit rating after repayments.

Maintaining a decent credit score requires careful management of your credit consumption. Your credit score begins to decline as your credit use increases. Maintaining a low credit usage rate is essential for maintaining a decent credit score and staying out of debt.

You can control your credit card bills by analyzing your credit usage. If your credit card use is too high, it’s an indication that you should cut down on your expenditures to decrease your ratio.

How to Use this Free Credit Utilization Calculator

Although free credit score services will offer you your credit usage rate, they may only get modified once a fortnight. As a result, you may wish to conduct your calculations between revisions. Below, we have highlighted the steps on how to use this Free Credit Utilization Calculator above:

Step 1: Enter your monthly payment amount in the first column

Step 2: Enter the percentage of the interest rate  

3 Step: Enter the credit term years

Step 4: Enter the interest accrual. This could be monthly, quarterly, semi-annually, or annually.

Step 5: Click on “calculate,” and the actual value of your Credit Utilization will be calculated and displayed instantly.

Step 6: If you desire to calculate again, click on “reset,” All the values you entered earlier will get cleared. 

Credit Utilization Calculator

Monthly payment (A)
Interest rate (i) %
Credit term, years (n)
Interest accrual
Please, Enter all field
Credit Amount (P)

What is your Credit Utilization Ratio?

The credit usage ratio compares the money you borrow on your credit cards to the credit line on those cards. Your credit usage would be zero if you never used your credit cards and had no debt.

You’re ‘utilizing’ part of your credit if you regularly owe money on one or more cards, and credit score agencies will notice. Credit usage is an essential aspect of your credit score.

Credit usage is the second most crucial component in calculating a credit score, according to FICO and Vantage, two major rating organizations. If your usage ratio is high, it means you’re probably overpaying. And this might have a negative influence on your grade.

Example Credit Utilization Calculation

Imagine a $700 credit card debt and a $1,000 credit limit. You’d get 0.70 if you divided 700 by 1,000. After that, multiply 0.70 by 100 to obtain 70%.

To determine your credit utilization for all accounts, start by adding up all balances. After that, total all of your credit limits. The whole sum is divided by the full available credit, and the result is multiplied by 100. Your entire credit usage ratio is the consequence.

Assume the following account balance and available credit:

Credit CardBalance Constrain  
A. $700$2,000  
B. $580$3,000  
C. $400$5,000  
Total:  $1,680$10,000  

To get the overall credit usage, divide $1,680 by $10,000, 0.17 (After rounding). Then multiply by 100 to obtain a percentage of 17 percent.

Why does your Credit Utilization Ratio Matter?

Credit Utilization Ratio

Because of how severely it affects your credit score, maintaining a low credit usage ratio across all of your credit cards should be a significant goal because how severely it affects your credit score.

According to both main credit scoring models, FICO and Vantage Score, the amount you owe relative to your available credit accounts for around 30% of your score. After payment history, credit usage is the second most crucial component of your credit score.

This may be a dual sword as it’s the simplest factor to regulate in the near term, but it can also swiftly lower your score. Having low balances while retaining firm credit limits demonstrates that you are a dependable borrower to creditors.

This may help raise your credit score and access more extensive credit lines, superior credit card and loan conditions, and more straightforward credit acceptance. If you have a significantly greater credit limit, a significant amount doesn’t always mean difficulties with issuers.

On the other hand, a high usage ratio may make you appear to lenders at higher risk, lowering your credit score. This might make it harder to get new credit and perhaps result in credit limit reductions. This might hurt your score and usage ratio even further.

How to Calculate Credit Utilization?

It’s easy to figure out how much credit you have. It simply requires a short time and some simple arithmetic to figure out. If you wish to compute your overall credit usage, you’ll have to get a copy of your most recent credit card attached invoice or all of your billing records.

You may also find out your most current balance and credit limit by logging into your online account or calling your credit card’s helpline.

A current copy of your credit history is also beneficial since it has all your bank account details in one location. Furthermore, the credit usage used to calculate your credit score depends on information from your credit file, which may or may not reflect your actual balance.

Next, look at your most recent credit card attached invoice for your current amount and available credit. If your line of credit is not displayed, you may find out by calling the customer care backside of your credit card.

The credit card provider may show your most considerable debt ever charged instead of a credit limit on credit cards without a defined available credit. Finally, multiply the result by 100 by dividing your total sum by your available credit. Your credit usage as a percentage is the end outcome.

How much of your Credit Line you’re Using?

It is typically recommended that you spend just under 30% of your credit line limit. That is an excellent guideline to follow. However, no one usage rate limit exists for all scoring models.

Using less of your credit available is typically better for your credit ratings. This is valid since using a high portion of your credit available may indicate that you may have difficulty repaying that loan. Overall, it would help if you strived to utilize as little credit as feasible to maintain your credit ratings and reports in excellent condition.

What is a Good Credit Utilization Ratio?

A lower usage percentage is preferable since it will improve your credit ratings. However, a standard usage ratio may be preferable to none at all. Typical usage may indicate that you’re not utilizing your credit cards properly, or everyday use may suggest that you are.

Some specialists advise keeping your total usage rate below 30% as a rule of thumb. People with the best credit ratings, on the other hand, have usage ratios in the single digits.

 If you have a high sum to pay off, your card has a limited limit, or you use your cards to collect points regularly, maintaining a low usage ratio might be challenging. However, once you know how usage is computed, you may be able to plan your payments to reduce your utilization ratio.

How do you Lower your Credit Utilization Ratio?

You may be wondering how to get a low credit usage ratio now that you realize how important it is. Here are a few money practices that might help you improve your credit score.

Pay off your debts

Paying more than the least on your credit cards each month can help you pay off your debt. Consider creating two or more credit card payments all through the month.

Small repayments might assist you in paying off debt faster and maintain your usage percentage consistent throughout the pay period. Just ensure you don’t overspend on your credit cards.

Request a credit limit increase.

You may also lower your credit use ratio by requesting a raise in the line of credit on one of your cards. According to a recent poll, 89 percent of those who demand a greater credit limit are granted one. Imagine you have a $7,000 debt on a card with a $12,000 credit limit.

Your credit usage ratio will drop from 80 percent to 52 percent if you increase your line of credit from $12,000 to $16,000. It’s crucial to resist the urge to pay up to the new limitation.

You don’t have to use your credit card to its maximum limit because it has a greater limit. Observe the 30-70 rule and stick to it as much as possible. When one of your credit cards reaches its 30 percent limit, you can balance it out with your other cards.

Either don’t use them until the debt is paid off or utilize the minuscule amount feasible to keep the average usage below 30%. To attain a low usage ratio, do the arithmetic every month on each credit card.

Apply for a new credit card.

Applying for a new credit card is another approach to boost your overall credit limit. A note of warning: although using a new credit card might help you lower your credit usage ratio, it may not help you increase your credit score.

Having a more significant number of credit cards may encourage you to consume more than you can afford to repay. This might harm your financial situation (not to mention your credit score). Like a new private loan, a new credit card will boost your credit report’s range of new accounts, reducing your credit rating.

Per-card vs. Overall — Which is More Important

Although your credit utilization rate is calculated by comparing the total credit utilized to the total balance available, the amount of credit you use on particular cards is also significant.

The same formula computes your per-card credit usage rate for your total use rate. This is correct, but it matches a credit card’s amount to outstanding credit on the same card.

How Your Credit Utilization Changes

Your credit usage may change as your credit card provider refreshes your credit card bill with the credit reporting agencies. Your credit usage will be affected by changes to your credit limits, debt swaps, expenditures, repayments, and the creation of new accounts.

It may be hard to keep track of daily or even quarterly variations in your credit usage, particularly if you have many credit cards. Maintain your credit card balances under 30% of your credit limit to keep your credit use under control.

However, the smaller the number, the better: Experts estimate that an individual with a credit score above 850 has a credit usage ratio of 13%. It’s a good idea to regularly check your overall credit usage to ensure that you’re properly handling your credit cards.


In conclusion, your credit usage ratio is just one of several factors determining your credit score, but it is essential. Maintaining a low credit usage rate might make you more appealing to lenders, allowing you to get higher returns and bigger loans. The above tips on how to calculate your credit utilization ratio will also aid you immensely here.