Credit Utilization Calculator

Credit Utilization Ratio Calculator

The sum of all balances currently owed on your credit cards.

The sum of all credit limits across all your credit card accounts.

Your Credit Utilization Ratio is:

function calculateCreditUtilization() { var balances = parseFloat(document.getElementById('totalBalances').value); var limits = parseFloat(document.getElementById('totalLimits').value); var resultArea = document.getElementById('resultArea'); var percentageDisplay = document.getElementById('utilizationPercentage'); var statusDisplay = document.getElementById('utilizationStatus'); if (isNaN(balances) || isNaN(limits) || limits <= 0) { alert("Please enter valid positive numbers. Total limit must be greater than zero."); return; } var ratio = (balances / limits) * 100; var roundedRatio = ratio.toFixed(2); resultArea.style.display = "block"; percentageDisplay.innerText = roundedRatio + "%"; if (ratio <= 10) { statusDisplay.innerText = "Excellent: Your utilization is very low, which is ideal for a high credit score."; statusDisplay.style.backgroundColor = "#e8f5e9"; statusDisplay.style.color = "#2e7d32"; percentageDisplay.style.color = "#2e7d32"; } else if (ratio <= 30) { statusDisplay.innerText = "Good: You are within the recommended 30% threshold."; statusDisplay.style.backgroundColor = "#fff3e0"; statusDisplay.style.color = "#ef6c00"; percentageDisplay.style.color = "#ef6c00"; } else { statusDisplay.innerText = "High: Utilization over 30% may negatively impact your credit score. Consider paying down balances."; statusDisplay.style.backgroundColor = "#ffebee"; statusDisplay.style.color = "#c62828"; percentageDisplay.style.color = "#c62828"; } }

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Understanding Your Credit Utilization Ratio

Credit utilization is one of the most critical factors in determining your FICO and VantageScore credit scores. It represents the percentage of your total available credit that you are currently using.

How the Calculation Works

The formula for credit utilization is straightforward: (Total Credit Card Balances ÷ Total Credit Card Limits) × 100.

For example, if you have two credit cards:

• Card A: $500 balance / $2,000 limit
• Card B: $1,000 balance / $3,000 limit

Your total balance is $1,500 and your total limit is $5,000. Dividing $1,500 by $5,000 gives 0.30, or a 30% utilization ratio.

The "30% Rule" and Beyond

Most financial experts recommend keeping your utilization below 30%. However, consumers with the highest credit scores often maintain a ratio below 10%. High utilization suggests to lenders that you may be overextended and at a higher risk of defaulting on payments.

Strategies to Improve Your Ratio

1. Pay down balances: The most direct way to lower your ratio is to pay off your debt.
2. Increase credit limits: Contact your bank to request a higher limit on existing cards. If your spending stays the same, your ratio will drop.
3. Keep accounts open: Even if you don't use a card, keeping the account open contributes to your total available credit, which helps your ratio.
4. Make multiple payments: Pay your bill twice a month to ensure a low balance is reported to the credit bureaus on your statement closing date.