What credit utilization means
Credit utilization is the share of your total credit card limit that you are using. If your cards have a combined limit of ₹1.5 lakh and your statements show ₹55,000, your utilization is about 37%. Credit bureaus such as CIBIL treat high utilization as a sign that you may be stretched, so it can pull your score down.
Utilization = total balances ÷ total credit limits × 100
How to lower it
- Pay part of the bill before the statement date, so a lower balance is reported.
- Spread spending across cards so no single card is near its limit.
- Ask for a higher limit, but only if you won't spend more.
- Keep old, fee-free cards open.
Questions people ask
What is a good credit utilization ratio?
Below 30% is generally seen as healthy, and below 10% is even better. Using most of your limit every month can lower your score, even if you pay in full.
Which balance do bureaus see?
Usually the balance on your statement date, not the amount after you pay. Paying part of the bill before the statement is generated lowers the utilization that gets reported.
Should I close an old card I don’t use?
Closing it reduces your total limit, which can raise your utilization. If the card has no annual fee, keeping it open often helps.
About this tool
An educational estimate. Credit bureaus don't publish their exact formulas, and utilization is only one factor; repayment history matters most. We don't collect or check any credit data. See the Credit health section for more.