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How to Lower Your Credit Utilization Ratio

How to Lower Your Credit Utilization Ratio

Your credit utilization ratio — the amount of credit you’re using compared to your total available credit — makes up 30% of your credit score. Keeping it low shows lenders you’re responsible and not overextended. Here’s how to lower it effectively.

  • Keep Your Balances Below 30%

    Ideally, aim to keep your credit usage under 30% of your total available credit. For the best results, try to stay under 10%.

  • Pay Before the Statement Date

    Make payments before your statement closing date — not just the due date. That way, your reported balance is lower when the bureau sees it.

  • Ask for a Credit Limit Increase

    If you’ve been using your card responsibly, request a credit limit increase. Many lenders allow this online without a hard inquiry. More credit = lower utilization (as long as your spending doesn’t increase).

  • Spread Spending Across Multiple Cards

    Instead of maxing out one card, divide your spending among two or three cards to reduce the percentage used on each one.

  • Don’t Close Old Credit Accounts

    Older accounts help your utilization ratio and credit age. Unless there’s an annual fee or another issue, try to keep old accounts open.

  • Pro Tip: Monitor Your Credit Usage

    Use our Credit Score Tools to track your balances, utilization, and see how changes may impact your score.

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