Your credit utilization is the amount of credit you've used out of the total amount available to you. It makes up 30% of your credit score. The lower your credit utilization, the more attractive you are to lenders. Credit utilization only impacts your revolving credit only (credit cards and line of credits). You can figure out your credit utilization by dividing your total revolving debt balances by your total limit.
Carrying large balances on your credit cards suggests you’re not able to pay them off in full, credit bureaus see this as an indication that you might have problems paying bills in the future. If for example, you’re relying on your credit to cover your regular expenses, once your credit cards are maxed and the lines of credit are used up, you may not be able to cover loan payments. We recommend keeping your utilization below 30% to see a better score. Credit providers and financial institutions will see your low ratio as responsible credit use. For example, if your credit card limit is $1,000 and your balance is $300, your credit utilization is 30%.