Create Date: August 24, 2024
Last Modified Date: November 26, 2024
Credit utilization can be easily calculated. It only requires the two following variables:
Your result will indicate the percent amount of your credit that has been spent. This is a number that is important to track to ensure you stay under your limit by a healthy amount. A general rule of thumb is that a good credit utilization percent is under 30%, ideally under 10%.
Our credit utilization tool is very easy and simple to use. The steps involved include:
Let's say we are trying to assess our current financial situation. We want to find our credit utilization and will be using this tool to do that. We have a limit of $9,500 and have currently spent $3,250 of it so far. To use the tool we will enter 3,250 into the total money used field and then 9,500 into the total credit limit field.
We are now ready to hit calculate and get our credit utilization. We find that ours is 34.21% which is a little on the high side.
A standard rule of thumb is that your credit utilization should remain below 30% at all times.
It is often said that you should use at least a little bit of your credit because zero utilization is more damaging to your credit score.
While we do not provide financial advice, if you find your credit utilization around 90% then you are toeing a dangerous line and should work on lowering that number as soon as possible.
