Utilization rate refers to the extent or percentage to which something is being utilized or used effectively. It is a measure of how much of a resource or capacity is being employed or utlized compared to its maximum potential.
Full definition
Always paying bills by the due date, keeping
credit utilization rates low, and avoiding opening unnecessary credit accounts are all good ways to maintain a «good» or better credit rating.
Just remember: the lower your credit
utilization rate on individual cards and across all your credit accounts, the higher your score will be.
For instance, credit
card utilization rate — the ratio of your credit card debt to available credit — can be a major impact on your score.
These accounts are important because their credit lines help to keep you credit
utilization rate as low as possible.
Take each of your open credit card accounts and calculate your credit
utilization rate by dividing the balance by the credit limit.
You have to be careful with your spending and strive to keep your credit
utilization rate at 30 % or below.
I understand that my
overall utilization rate will go down given that I don't plan on necessarily spending more per cycle.
But if you close the $ 10,000 limit card — perhaps because it's not being used — your credit
utilization rate jumps to 80 percent.
A low
utilization rate means less electricity is transmitted and sold to utility companies, producing less revenue for grid investors seeking to recoup their investment costs.
Lower available credit means a higher credit
utilization rate if you are carrying balances on your open cards.
Keeping your credit
utilization rate under 30 % can lead to a higher credit score, even if all other factors remain the same.
The credit agencies like to
see utilization rates below 30 %, so you need to do what you can to get to, or below, that number.
As a rule of thumb,
utilization rates above 30 % (give or take) are considered to be less - than - ideal for your credit score.
Even as law firm revenues rally and demand, particularly for transactional work, jumps back,
utilization rates remain low.
On the other hand, if you're trying to boost your credit score, then you'll want to pay off the card with the highest
utilization rate first.
Credit
utilization rate makes up 30 % of your credit score and if you're suddenly using more of your credit, expect for your score to take a nose dive.
Experts suggest you apply the
same utilization rate as an unsecured card, meaning limit your purchases to 30 % or less of the available credit.
If you closed one of your cards that had a $ 10,000 limit, your
new utilization rate would climb to 50 %.
Increasing your limit in small increments by getting a new credit card can lower your credit
utilization rate by giving you more money to use.
When using this method, take into consideration that your credit score might take a hit if you have a credit
utilization rate of over 30 percent.
Keep paying your bills on time and keep your credit
utilization rate as high as possible and you should see a difference in your credit score with patience and time.
However, closing one of the cards would put your credit
utilization rate at 40 %, which will negatively affect your score.
If the credit card company is only reporting a $ 500 limit, you will appear to be carrying a 60
percent utilization rate.
However, paying off your student loan will not impact your credit
utilization rate for the better in any way.
Phrases with «utilization rate»