Credit Utilization: The Key to a Better Credit Score (2025)
Master credit utilization to boost your credit score fast. Learn the ideal ratio, calculation methods, and 10 proven strategies to lower your utilization in the UK.
Credit utilization is the percentage of available credit you use. Keeping it below 30% helps your score.
| Utilization | Impact | Action |
|---|---|---|
| 0-10% | Excellent | Ideal range |
| 10-30% | Good | Acceptable |
| 30-50% | Fair | Try to reduce |
| 50%+ | Poor | Reduce urgently |
Multiple Cards Help
Frequently Asked Questions
What is the ideal credit utilization ratio?
Aim to keep your credit utilization below 30% on each card and overall. For the best credit scores, try to stay under 10%. Even if you pay your balance in full each month, the balance reported to credit agencies is usually your statement balance.
How quickly can lowering credit utilization improve my score?
Credit utilization updates monthly when credit card companies report to agencies. You can see improvements within 1-3 months of lowering your utilization. It's one of the fastest ways to boost your credit score.
Does closing a credit card hurt my utilization ratio?
Yes, closing a credit card reduces your total available credit, which increases your utilization ratio. Keep old cards open even if you don't use them regularly. Make a small purchase every 6 months to keep them active.
Should I request a credit limit increase to lower utilization?
Yes, if you're confident you won't be tempted to spend more. Increasing your credit limits while keeping balances the same automatically lowers your utilization ratio. Contact your credit card issuers every 6-12 months to request increases.
Does per-card utilization matter or just overall utilization?
Both matter. Credit scoring models look at your overall utilization and your per-card utilization. Avoid maxing out individual cards even if your overall utilization is low, as having one card at 90% utilization will hurt your score.