Definition
Your credit card balances as a percentage of your credit limits. Keeping it under 30%, ideally under 10%, is one of the fastest levers on your credit score.
Why it matters
Utilization has no memory: unlike late payments, it resets the moment balances drop. That makes it the quickest legitimate way to move a score before a big application.
Example
Cards carrying $2,000 of balances against $10,000 of limits sit at 20% utilization. Paying $1,200 before the statement closes drops utilization to 8%, and the score typically responds within a cycle or two.
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.