How to Calculate Your Credit Utilization Ratio

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Your credit utilization is the percentage of your credit limit that's being used. Your credit utilization is part of the level of debt factor which is 30% of your credit score. As your credit utilization rises, your credit score starts to decrease. Keeping a low credit utilization is good for a healthy credit score and to keep yourself out of debt.

Calculating your own credit utilization can help you manage your credit card balances.

If your utilization is too high, you can rein in your spending and reduce your balances to bring it down.

What You Need

Calculating your credit utilization is pretty easy. It only takes a few minutes and a bit of simple math - no complicated equations or tricky math is necessary.

You'll need a copy of your latest credit card billing statement or all your billing statements if you want to calculate your total credit utilization. A recent copy of your credit report can also be useful because it will include all your account information in one place. Plus, the credit utilization that factors into your credit score will be based on the information in your credit report.

Steps for Calculating Your Credit Utilization

  1. Locate your current balance and credit limit on your latest credit card billing statement. If your credit limit is not listed, you can call your credit card's customer service using the number on the back of your credit card to find out.
  1. Divide the credit card balance by the credit limit. (In your calculator, enter the credit card balance, press the "divide by" button, then enter the credit limit and press the "equal" button.") Do not clear your calculator yet.
  2. Multiply the result by 100. (In your calculator press the "multiply" button and enter 100. Then press the "equal" button.) The result is your credit utilization as a percentage.

    Example Credit Utilization Calculation

    Let's say your credit card balance is $600 and your credit limit is $1,000. You would divide 600 by 1,000 to get .60. Finally multiply .60 by 100 to get 60%.

    If you want to calculate your credit utilization for all your accounts, first add all the balances. Then add all the credit limits. Divide the numbers and multiply by 100.

    Let's say you have these credit card balances and credit limits:

    Credit CardBalanceLimit
    A$655$1,000
    B$1,256$4,000
    C$890$3,000
    Total$2,801$8,000

    To calculate the total credit utilization for these, you would divide $2,801 by $8,000 to get .35 (after rounding). Then multiply by 100 to get 35%.

    How Your Credit Utilization Changes

    Your credit utilization will fluctuate often as your credit card issuer updates your credit card balance with the credit bureaus. Changes to your credit limits and opening new accounts will also affect your credit utilization. Keeping up with the daily or even monthly changes to your credit utilization can be tough. You can best manage your credit utilization by keeping your credit card balances below 30% of the credit limit. Then, do a periodic checkup on your total credit utilization to be sure you're managing your credit cards well.