Credit Utilisation Calculator: How Lenders See You
See how your credit card balances affect your credit score. A utilization ratio below 30% is key to a healthy score.
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Great job! Your credit utilization is in the ideal range. Keep it below 30% to maintain a positive impact on your credit score.
Why Utilization Matters
Credit utilization is the second most important factor in your credit score, making up about 30% of it. It compares how much credit you're using to your total available credit. Lenders see high utilization as a sign of financial stress, making you a riskier borrower. Keeping it low shows you can manage credit responsibly.
Tips for Low Utilization:
- Aim to keep your overall and per-card utilization below 30%. Below 10% is even better.
- Make payments before your statement closing date to report a lower balance.
- Consider asking for a credit limit increase on cards you manage well (but don't increase your spending).
- Set up balance alerts to notify you when you're approaching the 30% threshold.
What is Credit Utilisation?
Credit utilisation refers to the percentage of your total available credit limit that you are currently using across all your revolving credit accounts (like credit cards and store cards). It is one of the most significant factors influencing your credit profile, as detailed in our credit report guide.
Why Your Utilisation Ratio Matters
Lenders view high credit utilisation (typically above 30%) as a sign that you might be relying too heavily on credit to make ends meet. Keeping your balances low demonstrates responsible borrowing behaviour and can positively impact the estimates you might see in our credit score simulator.
The Optimal Range
It is universally recommended to keep your overall credit utilisation below 30%. However, keeping it below 10% is considered optimal for achieving the best possible credit scores. For tools and tips on managing your spending so you don't rely heavily on credit, try our budget balancer.
How to Improve Your Utilisation
The most direct way to lower your utilisation ratio is to clear your credit card debt by paying down your existing balances. It's also important to avoid closing unused credit accounts; closing an account reduces your total available credit, which can inadvertently spike your overall utilisation ratio.
You can also spread your usage across multiple accounts or use credit builder cards carefully to increase your overall available limits without increasing your spending.
For more strategies on managing your credit, visit the credit rebuilders hub. If you're overwhelmed by high balances and struggling to make minimum payments, learn about available debt solutions or seek free debt advice. Options like a Debt Relief Order (DRO)—which now covers debts up to £50,000 with a £0 setup fee—might be available to you.