How to Use the Credit Percentage Calculator
- Enter your Total Credit Limit (the maximum amount of credit available to you from all credit cards)
- Enter your Credit Currently Used (the total amount you currently owe across all credit cards)
- Enter the Number of Credit Cards you have
- Click the Calculate button to see your credit utilization percentage
- Review the interpretation to understand how your credit utilization affects your credit score
Understanding Credit Utilization
Credit utilization is one of the most significant factors affecting your credit score. It measures how much of your available credit you're using at any given time. Keeping this ratio below 30% is generally recommended for optimal credit health.
Why Credit Utilization Matters
Your credit utilization ratio is calculated by dividing your total credit balance by your total available credit limit. For example, if you have a total credit limit of $10,000 and owe $3,000, your utilization is 30% ($3,000 ÷ $10,000 = 0.30 or 30%).
Practical Tips for Improving Your Utilization Ratio
- Pay down credit card balances regularly
- Consider having your credit limits increased (but don't close old accounts)
- If you have multiple cards, try distributing your balances evenly
- Avoid maxing out any single card
- Pay more than the minimum payment on high-balance cards