Credit & Debt

Credit Utilization

Credit utilization compares revolving balances with available credit limits. It is one factor that can affect a credit score.

4 min

Credit 101 • 08

Credit utilization asks how much of your available revolving credit you are using.

A higher balance relative to the limit means higher utilization.

It is commonly discussed with credit cards and other revolving credit.

The number can change as balances and limits change.

Utilization can change when

01You make purchases02You make payments03A credit limit changes04A balance is reported to the bureau

Balance and utilization are not the same.

01

Balance

The dollar amount you owe.

02

Utilization

The balance as a share of available revolving credit.

The calculation is simple.

Credit limit$5,000
Balance$1,000
Utilization20%
FCAC guidanceTry to use less than 30% of total limit

Thirty percent is guidance, not a magic scoring line.

Scoring models use several factors, and the exact formulas are not public.

Manage utilization by

01Staying below your limits02Paying balances down03Avoiding unnecessary debt04Watching total revolving balances

Remember this

Utilization is one part of the credit picture.

Keep it manageable, but do not treat one percentage as a guarantee of a particular score.

Lesson complete

Reviewed 2026-08-18

Sources

Financial Consumer Agency of CanadaImproving your credit score ↗Financial Consumer Agency of CanadaCredit report and score basics ↗
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