Credit Utilization is the one of the most important factor in your credit score.

Making up 30% of your credit score it is only surpassed in importance by payment history.  So when trying to repair or restore your credit it is essential that you take control of your credit utilization.  In order to do this you must first understand it.

What is Credit Utilization?

According to the major credit bureau Experian credit utilization ratio is defined as “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.”

In short, you are comparing how much you can spend to how much you actually spent.

 

Credit Utilization Calculator

Click the image above to use the wonderful credit utilization calculator provided by Nerd Wallet.