# What is the 30 credit utilization rule?

Asked by: Janelle Cartwright  |  Last update: February 9, 2022

Using no more than 30% of your credit limits is a guideline, not a rule — and using less is better for your score. ... Many credit experts say you should keep your credit utilization ratio — the percentage of your total credit that you use — below 30% to maintain a good or excellent credit score.

## How do you calculate a 30 percent credit limit?

You can calculate credit utilization yourself using this formula:
3. Divide the total balance by the total credit limit.
4. Multiply by 100 to see your credit utilization ratio as a percentage.

## How much should you spend on a \$200 credit limit?

To keep your scores healthy, a rule of thumb is to use no more than 30% of your credit card's limit at all times. On a card with a \$200 limit, for example, that would mean keeping your balance below \$60. The less of your limit you use, the better.

## Is credit utilization per card or total?

Your total credit utilization ratio is the sum of all your balances, divided by the sum of your cards' credit limits. So, for example, if you have two credit cards, each with a \$1,000 limit, and owe \$500 on one and \$250 on the other, your credit utilization ratio is \$750 divided by \$2,000, or 37.5 percent.

## What's a good credit utilization ratio?

To maintain a healthy credit score, it's important to keep your credit utilization rate (CUR) low. The general rule of thumb has been that you don't want your CUR to exceed 30%, but increasingly financial experts are recommending that you don't want to go above 10% if you really want an excellent credit score.

## Credit Card Utilization Myths | BeatTheBush

44 related questions found

### What happens if I use more than 30 of my credit limit?

Using more than 30% of your available credit on your cards can hurt your credit score. The lower you can get your balance relative to your limit, the better for your score. (It's best to pay it off every month if you can.) ... (It's safe to pay it off every month if you can.)

### Is 20 percent credit utilization good?

Your credit utilization rate — the amount of revolving credit you're currently using divided by the total amount of revolving credit you have available — is one of the most important factors that influence your credit scores. So it's a good idea to try to keep it under 30%, which is what's generally recommended.

### What is 30 of a 300 credit limit?

30% of a \$300 limit is \$90, only use this amount or less if you don't want it to adversely affect your credit score. If you're going to use that much than you need to pay it down to 30% before the statement date not the due date so it doesn't affect your credit score.

### Is 40 credit card utilization good?

A credit utilization must remain within 30% to ensure you maintain a good credit score. You should do well not to utilize more than 40% of the limit offered.

### What is a 5 24 rule?

Many card issuers have criteria for who can qualify for new accounts, but Chase is perhaps the most strict. Chase's 5/24 rule means that you can't be approved for most Chase cards if you've opened five or more personal credit cards (from any card issuer) within the past 24 months.

### What would a FICO score of 800 be considered?

Your 800 FICO® Score falls in the range of scores, from 800 to 850, that is categorized as Exceptional. Your FICO® Score is well above the average credit score, and you are likely to receive easy approvals when applying for new credit.

### What happens if I go over my credit limit but pay it off?

Using credit cards and paying off your balances every month or keeping balances very low shows financial responsibility. ... More, exceeding your credit card's limit can put your account into default. If that happens, it will be noted on your credit report and be negatively factored into your credit score.

### What actions hurt your credit score?

5 Things That May Hurt Your Credit Scores
• Highlights: Even one late payment can cause credit scores to drop. ...
• Making a late payment. ...
• Having a high debt to credit utilization ratio. ...
• Applying for a lot of credit at once. ...
• Closing a credit card account. ...
• Stopping your credit-related activities for an extended period.

### How is utilization calculated credit?

Your credit utilization rate, sometimes called your credit utilization ratio, is the amount of revolving credit you're currently using divided by the total amount of revolving credit you have available. In other words, it's how much you currently owe divided by your credit limit.

### How do I calculate my credit utilization?

How to Calculate Your Credit Utilization
3. Divide your total revolving credit balance (from Step 1) by your total credit limit (from Step 2).
4. Multiply that number (from Step 3) by 100 to see your credit utilization as a percentage.

### Is one credit or 0 Utilization better?

Using 1% of your credit limit can be even better for credit scores than zeroing out all your card balances. In general, using as little of your credit card limits as possible is better for your score. ... Turns out, having 1% of your credit limits in use may help your credit score even more than showing 0% usage.

### Why is my credit score going down when I pay on time?

There's a missed payment lurking on your report

A single payment that is 30 days late or more can send your score plummeting because on-time payments are the biggest factor in your credit score. Worse, late payments stay on your credit report for up to seven years.

### Is 7 credit cards too many?

As with almost every question about credit reports and credit scores, the answer depends on your unique credit history and the scoring system your lender is using. "Too many" credit cards for someone else might not be too many for you. There is no specific number of credit cards considered right for all consumers.

### Is a \$500 credit limit good?

You need good credit for approval. Even students can get a credit card with a \$500 limit: The Chase Freedom® Student credit card card. ... It's good to note that \$500 is just the minimum credit limit on these cards. If your credit score and income are high, and your debt is low, you can qualify for a higher starting limit.

### How much of a 1500 credit limit should I use?

Experts generally recommend maintaining a credit utilization rate below 30%, with some suggesting that you should aim for a single-digit utilization rate (under 10%) to get the best credit score.

### Should I keep my credit card balance at zero?

The standard recommendation is to keep unused accounts with zero balances open. A zero balance on a credit card reflects positively on your credit report and means you have a zero balance-to-limit ratio, also known as the utilization rate. Generally, the lower your utilization rate, the better for your credit scores.

### Does 0 utilization hurt credit score?

At 0% utilization, you won't get all the credit score points available, but you're not really “hurting” your credit much, and it shouldn't lead to bad credit if you're managing your debts carefully. Once you have a FICO or VantageScore above 750, your credit is already in great shape.

### What is the best FICO score possible?

FICO scores range from 350 to 850; under 580 is considered poor credit and 740 or higher is considered very good or exceptional credit.

### Is it better to pay your credit card in full?

In general, we recommend paying your credit card balance in full every month. When you pay off your card completely with each billing cycle, you never get charged interest. That said, it you do have to carry a balance from month to month, paying early can reduce your interest cost.