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Credit utilization: what it means

Credit utilization is how much of your credit limits you are using: it compares what you owe on your cards with your total available credit. Scoring models look at how close you are to being maxed out; if you use too much of your limit, your score can drop.

In Spanish it is

Utilización de crédito

Also written as: credit utilization ratio · utilization rate · credit usage

A hand takes a leaflet out of a mailbox at an apartment building.

Verified on October 17, 2026

2 official sources

See the whole dictionary

The full explanation

According to the CFPB, experts advise using no more than 30% of your total credit limit. If you close cards and move the balances onto one, the share you use can go up. You do not need to carry a balance to have a good score: paying in full each month helps.

An example

Pilar is close to the limit on one of her cards. She decides to pay more than the minimum each month to bring the balance down and keep it well below the limit.

You will see it in…

Your card statement (balance and credit limit)
Your credit report, with the balance on each card
Apps that explain what affects your score

Words that go with it

You will rarely see this word alone. These are the ones that show up with it on the same papers.

More guides that use “credit utilization”

Still confused by a paper?

A HUD-approved housing counselor can walk you through it. Agencies usually charge little or nothing, many work in Spanish, and they do not sell you anything.

What a housing counselor does See free help

Official sources

We sum up what these official sources say, in plain words. We add no rules they do not state; when a rule changes, the definition and its date change.

1. CFPB · How do I get and keep a good credit score? (external site) · in English · Verified on October 17, 2026
2. CFPB · How to rebuild your credit (external site) · in English · Verified on October 17, 2026