Explanation
Utilization is calculated per card and across all revolving accounts combined. Scoring models look at both the overall ratio and the highest single-card ratio.
Because utilization is recalculated every billing cycle, it is one of the fastest ways to move a credit score — paying down balances before the statement date lowers the reported number.
Examples
- •$300 balance on a $1,000 limit = 30% utilization
- •Combined $2,000 of balances on $10,000 of limits = 20% utilization
- •Keeping utilization under 10% is the optimization target most members use
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