What does credit utilization rate mean?

Your credit utilization rate is the percentage of your available credit that you’re currently using. It’s calculated by dividing your current balance by your credit limit.

For example:

If your credit card has a $1,000 limit and your balance is $300, your utilization rate is 30%.

Note: This rate plays a major role in your credit score — in fact, it’s one of the most important factors. High utilization (especially over 30%) can negatively impact your score, so it’s recommended to keep your usage below that threshold when possible.