Credit limit & utilization
Your limit is the most you can borrow. Utilization is your balance ÷ limit, usually measured at the cutoff. Lower is generally seen as healthier.
CardLab shows an educational Credit Health Meter. It is not a credit score and does not predict one.
Pay before the cutoff to lower the utilization that gets reported.
Common questions
How do you calculate credit utilization?
Divide your balance by your credit limit and multiply by 100. A $1,450 balance on a $3,000 limit is roughly 48% utilization. It is measured per card and across all your cards combined, normally using the balance reported on each statement date.
What is a good credit utilization ratio?
Lower is generally treated as healthier, and staying under about 30% is the common rule of thumb. Utilization is recalculated every time a new balance is reported, so a high month is not permanent - it is a snapshot, not a record.
How can I lower my reported utilization?
Pay down the balance before the statement date rather than the due date, since the statement balance is what gets reported. Requesting a higher limit or spreading spending across cards also lowers the ratio. Paying in full after the statement closes avoids interest but does not change the number already reported.