Credit utilisation explained: how much of your limit you use
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Quick answer: Credit utilisation is the percentage of your available credit you are using. Keeping it below 30% — and ideally below 10% — on each card and overall helps your credit score. High utilisation signals financial stress to lenders.
Credit utilisation is one of the most influential factors in your UK credit score, yet many people have never heard of it. It measures how much of your available credit you are using at any point. Maxing out cards or sitting at high utilisation hurts your score even if you pay on time every month.
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Read the full credit cards & loans guide →Primary source: www.gov.uk/consumer-protection-rights/credit-cards
How utilisation affects your score
Credit reference agencies see your balance and limit on each account. A £1,500 balance on a £2,000 limit card is 75% utilisation — a red flag even with perfect payment history.
Both per-card and overall utilisation matter. Three cards each at 20% utilisation is healthier than one card at 60% and two at 0%.
Quick ways to lower utilisation
Pay down balances before your statement date. Lenders report the balance on your statement date, not after you pay. Paying early means a lower reported balance.
Request a credit limit increase without spending more. The same balance on a higher limit means lower utilisation.
Spread spending across multiple cards rather than concentrating on one.
Utilisation myths
You do not need to carry a balance to build credit. Paying in full each month with low utilisation is better than maintaining a balance.
Closing unused cards can hurt utilisation by reducing your total available credit. Keep old cards open with a small recurring charge if there is no fee.
Common questions
What is the ideal credit utilisation percentage?
Below 30% is good, below 10% is excellent. There is no benefit to having 0% utilisation on all cards — a small balance on one card is fine.
Does utilisation affect all types of credit?
It primarily affects revolving credit — credit cards and store cards. Mortgage and loan balances are not factored into utilisation ratios.
How quickly does lower utilisation improve my score?
Utilisation updates each month when lenders report to credit agencies. Paying down before your statement date can show improvement within one billing cycle.