What is a good credit utilization ratio?

A good credit utilization ratio is below 30% — meaning you're using less than $300 of every $1,000 in available credit. Lower is generally better; consumers with the highest FICO scores tend to keep utilization in the single digits.

What credit utilization ratio means

Credit utilization is the percentage of your revolving credit limit you're currently using. If your total credit card limit is $10,000 and your combined balances are $2,500, your utilization ratio is 25%. The calculation applies both to individual cards and to all your cards combined — scoring models weigh both.

The 30% guideline — and why lower is better

The CFPB recommends keeping utilization below 30% to signal responsible credit management to lenders. But 30% is a ceiling, not a target. Consumers with scores above 800 typically carry utilization under 10%. Paying your full statement balance each month is the most reliable way to stay low.

Under 10% — associated with the highest credit score tiers
10–29% — generally considered good; minimal negative signal
30–49% — begins to weigh on scores; lenders may view as elevated risk
50%+ — meaningfully hurts scores; high utilization is the second-largest FICO factor after payment history

How to lower your utilization ratio

Pay down balances before the statement closing date — that's when most issuers report to the bureaus, not the due date
Request a credit limit increase — more available credit lowers your ratio even if spending stays flat
Avoid closing old cards — closing a card removes its limit from your total available credit, pushing utilization up
Spread spending across cards — rather than maxing one card, keeping each card's individual utilization low helps

Key numbers on credit utilization

The CFPB recommends keeping credit utilization below 30% to demonstrate responsible credit use. — CFPB
Credit utilization accounts for approximately 30% of a FICO Score — the second-largest scoring factor after payment history. — myFICO
Closing a credit card can increase your utilization ratio because it reduces your total available credit, potentially lowering your score. — CFPB

Key takeaways

Keep utilization below 30% as a floor — single digits is where top-tier scores live.
Pay balances before the statement closing date, not just the due date, to control what gets reported.
Never close an old card just because you don't use it — its limit protects your ratio.
Utilization resets every billing cycle, so the damage from a high-utilization month is reversible.