What Is a Good Credit Card Utilization Rate?

Carrying credit card debt can be pricey. Consider the credit cards in the U.S. News database, which have an average annual percentage rate (APR) that spans from roughly 15% to 23% and includes both the interest rate and any fees.

Knowing what credit scoring models view as a healthy credit card utilization rate is helpful if you want to build and maintain good credit ratings. However, the response to this issue depends on the credit scoring model in use as well as your objectives.

Maintaining a credit utilization rate of 30% or below is frequently advised by VantageScore specialists. Nonetheless, the ideal debt-to-limit ratio is as near to 0% as is feasible.

The FICO score's developer, Fair Isaac Corp., also advises keeping a low credit card utilization rate—the lower, the better.

Do you want to have a high FICO score? Consumers with scores between 800 and 850 have an average revolving utilization rate of 4% to 5%, claims the business.

A helpful generalization is offered by Chad Kusner, president of the credit repair business Credit Repair Resources. You should demonstrate that you are using your credit cards while also maintaining the lowest balance possible, he advises.

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