Credit utilization refers to how much credit a person or business is using in comparison to their available credit limits. It is an important factor that lenders and creditors consider when evaluating someone's creditworthiness, as it indicates how responsible they are with managing their debt. A high credit utilization ratio can indicate that the individual is maxing out their credit cards or taking on too much debt, which may suggest a higher risk for the lender. On the other hand, a low credit utilization ratio shows that the person is using only a small portion of their available credit and is managing their debt responsibly.