Credit Utilization
Credit utilization is the percentage of your total available revolving credit that you are currently using. It is calculated by dividing your total outstanding credit card balances by your total credit limits across all cards, then multiplying by 100. For example, if you have $1,500 in balances across cards with a combined limit of $10,000, your utilization is 15%.
Credit bureaus capture a snapshot of your balances on the statement closing date and report that to your credit report. This means your utilization fluctuates monthly and directly impacts your credit score — it is one of the fastest factors you can improve.
Quick Facts
| Utilization Level | Impact |
|---|---|
| Below 10% | Excellent — best for score |
| 10% – 30% | Good — acceptable range |
| 30% – 50% | Fair — score impact begins |
| 50% – 75% | Poor — meaningful score damage |
| Above 75% | Very poor — significant negative impact |
Formula: (Total balances ÷ Total credit limits) × 100 = Utilization %
Canadian Context
In Canada, credit utilization makes up approximately 30% of your credit score — the second-largest factor after payment history. If you pay your balance in full each month but charge a large amount relative to your limit, your score may still be temporarily reduced when the high balance is reported. A useful strategy is to request a credit limit increase (which lowers utilization without changing your spending) or to pay your balance down before the statement closing date. Note that utilization is measured across all cards combined, not just per card — individual card utilization also matters, however. See our credit scores guide for more detail.
Related Glossary Terms
Information on this page is provided for general educational purposes. Scoring models vary between bureaus and lenders — see your credit report for personalized information.