function calculateUtilization() {
// 1. Get Input Values
var balanceInput = document.getElementById('ccTotalBalance').value;
var limitInput = document.getElementById('ccTotalLimit').value;
var resultBox = document.getElementById('utilizationResult');
var pctDisplay = document.getElementById('percentageDisplay');
var adviceDisplay = document.getElementById('adviceDisplay');
var balanceDisplay = document.getElementById('balanceRemaining');
// 2. Validate Inputs
if (balanceInput === "" || limitInput === "") {
alert("Please enter both your total balance and total credit limit.");
return;
}
var balance = parseFloat(balanceInput);
var limit = parseFloat(limitInput);
if (isNaN(balance) || isNaN(limit)) {
alert("Please enter valid numeric values.");
return;
}
if (limit <= 0) {
alert("Credit limit must be greater than zero.");
return;
}
if (balance < 0) {
balance = 0; // Handle negative balance input gracefully
}
// 3. Perform Calculation
var ratio = (balance / limit) * 100;
var remaining = limit – balance;
// 4. Update UI
pctDisplay.innerHTML = ratio.toFixed(2) + "%";
balanceDisplay.innerHTML = "$" + remaining.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
// 5. Determine Advice/Status
adviceDisplay.className = "result-advice"; // Reset classes
if (ratio == 0) {
adviceDisplay.innerHTML = "Status: Zero Utilization. While safe, a tiny balance (1%) is often better for scoring than 0%.";
adviceDisplay.classList.add("status-excellent");
} else if (ratio <= 9) {
adviceDisplay.innerHTML = "Status: Excellent. Keeping utilization below 10% is ideal for the highest credit scores.";
adviceDisplay.classList.add("status-excellent");
} else if (ratio <= 29) {
adviceDisplay.innerHTML = "Status: Good. Experts recommend keeping utilization below 30% to avoid score penalties.";
adviceDisplay.classList.add("status-good");
} else if (ratio <= 49) {
adviceDisplay.innerHTML = "Status: Warning. Your utilization is getting high. Try to pay down balances to boost your score.";
adviceDisplay.classList.add("status-warning");
} else if (ratio <= 74) {
adviceDisplay.innerHTML = "Status: High Risk. Utilization over 50% can significantly hurt your credit score.";
adviceDisplay.classList.add("status-danger");
} else {
adviceDisplay.innerHTML = "Status: Critical. Maxing out cards is a major negative factor for lenders.";
adviceDisplay.classList.add("status-danger");
}
// Show result
resultBox.style.display = "block";
}
How to Calculate Utilization Rate on Credit Card
Your credit utilization rate (also known as your credit utilization ratio) is one of the most significant factors in calculating your credit score, accounting for approximately 30% of your FICO® Score. It measures the amount of available revolving credit you are currently using.
Understanding this metric is crucial for anyone looking to improve their financial health, apply for a mortgage, or secure lower interest rates on loans. Unlike complex loan amortizations, credit utilization is a snapshot of your current debt relative to your limits.
The Utilization Formula
The math behind credit utilization is straightforward. It is a percentage derived from dividing your total credit card balances by your total credit limits.
It is important to note that credit scoring models look at utilization in two ways:
Aggregate Utilization: The sum of all your balances divided by the sum of all your credit limits.
Per-Card Utilization: The ratio on each specific card. Even if your total utilization is low, maxing out a single card can still negatively impact your score.
What is a Good Utilization Rate?
While there is no magic number that guarantees a perfect credit score, general financial guidelines categorize utilization rates as follows:
0% – 9% (Excellent): This range demonstrates exceptional discipline and poses the lowest risk to lenders. However, having 0% usage reported for months might result in an "inactive" status, so a small balance is often better than none.
10% – 30% (Good): This is the industry standard recommendation. Keeping your debt below 30% of your limit shows lenders you can manage credit responsibly.
30% – 49% (Warning): Crossing the 30% threshold is where your credit score may start to see noticeable drops. Lenders may view you as over-leveraged.
50% – 100% (High Risk): High utilization suggests financial distress or reliance on credit to pay bills. This significantly lowers your credit score and makes it difficult to get approved for new credit.
Strategies to Lower Your Utilization Rate
If your calculator result shows a high percentage, consider these strategies to lower it:
Make Mid-Cycle Payments: Credit card issuers typically report your balance to bureaus once a month (usually on the statement closing date). If you pay off your balance before the statement closes, a lower balance (or $0) will be reported.
Request a Limit Increase: If you have a good payment history, ask your issuer to increase your credit limit. If your limit goes up but your spending stays the same, your utilization rate mathematically goes down.
Spread Expenses: Instead of putting a large purchase on one card (spiking its specific utilization), consider spreading costs across multiple cards if you can pay them off quickly.
Frequently Asked Questions
Does utilization apply to all loans?
No. Credit utilization specifically applies to revolving credit, such as credit cards and lines of credit. It does not apply to installment loans like mortgages, auto loans, or student loans.
Does closing a credit card hurt my utilization?
Yes, it often does. When you close a credit card, you lose that card's credit limit. This reduces your Total Credit Limit (the denominator in the formula). If you still have balances on other cards, your utilization rate will spike because you have the same debt spread over less available credit.
When is the best time to check my utilization?
You should calculate your utilization before applying for any major loan (like a mortgage or car loan). Use the calculator above to see where you stand and pay down balances to get below 30% (or ideally 10%) at least 30-45 days before applying.