In this guide
Under 30% is a rule of thumb, not a line in the scoring model. myFICO says "the data doesn't support the implication that your credit score will dip once your utilization ratio crosses the 30% threshold", and suggests that keeping utilization below 10% helps build and maintain a good score (myFICO, What Should My Credit Utilization Ratio Be?). Lower is better. What gets reported matters more than the percentage you target.
The 30% in FICO's materials is a different number. "Amounts owed" is 30% of a FICO Score (myFICO, Amounts Owed). That is a weight, not a target ratio. VantageScore's own guide says to keep the ratio under 30% if possible, as long as it stays above 0% (VantageScore guide). Both treat 30% as a guideline, not a cliff.
How utilization is measured
Utilization is a balance divided by a credit limit, on each card and across all your cards. myFICO's example uses three cards: one with a $5,000 limit and $1,000 balance is 20%, others come to 40% and 75%, and the total is roughly 36% (myFICO). Closing a card removes its limit from the total, so the same balances produce a higher ratio.
| Three cards, $10,000 limit each | Overall | Highest card |
|---|---|---|
| $900 on one card | 3% | 9% |
| $2,700 spread evenly ($900 each) | 9% | 9% |
| $2,700 all on one card | 9% | 27% |
| $9,500 all on one card | 32% | 95% |
Rows two and three carry the same debt and the same overall ratio. They differ on the per-card ratio. Scoring looks at both levels, so keep any single card well below its limit even if your overall figure is low. This is arithmetic on the definition. FICO does not publish how much each level weighs.
The balance that gets reported
myFICO says card companies typically report the balance you have when your statement closes. That is not the due date. A card paid in full every month can still show a high ratio if you spent heavily during the cycle.
Worked example: a card with a $5,000 limit and $1,800 of purchases by the statement closing date reports 36% ($1,800 / $5,000). To report a lower figure, pay down before the closing date:
| Target reported utilization | Balance allowed at closing | Pay before closing |
|---|---|---|
| 30% | $1,500 | $300 |
| 10% | $500 | $1,300 |
| 1% | $50 | $1,750 |
The statement close optimizer does this arithmetic for each card and shows the date to pay by.
Paying before the close still avoids interest
The CFPB says that if your card has a grace period and you are not carrying a balance, you avoid interest on new purchases by paying your balance in full by the due date (CFPB, grace period). Issuers must mail or deliver statements at least 21 days before the due date. A payment before the closing date is an extra payment on top of that. See how credit card interest works. You do not need to carry a balance to show one.
Zero is not the goal either
FICO says that in some cases a low utilization ratio has a more positive effect on your scores than using none of your available credit (myFICO). So a small balance reported on one card is fine. I could not find a published FICO figure for the best exact ratio, so treat "1% to 9%" style rules as community folklore, not documentation.
How long a high balance counts
For a score model that looks at the current reported balance, the effect ends when a lower balance reports. myFICO says "as soon as you lower your ratio, your FICO Scores will respond accordingly." Newer models also look at history. FICO Score 10T uses "trended data" covering the previous 24 months or longer (myFICO, FICO Score Versions), and VantageScore says 4.0 looks back up to two years where 3.0 looked at one month. For loans scored on those models, a long run of low balances helps more than one good month. FICO Score 8 is the version most widely used by lenders, and mortgage lenders may use others (what credit score you need for a mortgage).
What to do
- Find each card's statement closing date and pay down before it.
- Keep every single card well under its limit, not only the total.
- Do not close old cards for tidiness. The limit leaves your total.
- If a limit increase is on offer, ask whether it uses a hard inquiry first. See hard vs. soft inquiries.
- Check that your reported limits are correct. See how to get your free credit reports.
Utilization sits inside the biggest-but-one factor of the score. See what moves your FICO score for the full weights.
Frequently asked questions
Is the 30% credit utilization rule real?
It is a guideline, not a scoring cliff. myFICO says the data does not show a drop when you cross 30%, and VantageScore's guide says to stay under 30% if possible while keeping it above 0%.
What is a good credit utilization ratio?
myFICO says keeping it below 10%, with on-time payments, can help build and maintain a good FICO Score.
Is 0% utilization bad?
Not harmful, but FICO says a low ratio can score better than using none of your credit. A small balance on one card is enough.
Does utilization use my statement balance or my current balance?
The balance your issuer reports, which myFICO says is typically the balance when your statement closes.
Does per-card or overall utilization matter?
Both. myFICO's own example works out the ratio for each card and for all cards combined, and both can affect your score.
How fast does paying down a balance raise my score?
myFICO says scores respond as soon as the lower ratio is reported. That takes one statement cycle, because the issuer reports at closing.
Does closing a credit card hurt my utilization?
It can. The closed card's limit leaves your total, so the same balances on other cards make a higher percentage.
Sources
- What Should My Credit Utilization Ratio Be?, myFICO. Checked October 2026.
- Amounts Owed, myFICO. Checked October 2026.
- FICO Score Versions, myFICO. Checked October 2026.
- What is a grace period for a credit card?, Consumer Financial Protection Bureau. Checked October 2026.
- The Guide to Your VantageScore Credit Score, VantageScore. Checked October 2026.
Written by
Teja PagidimarriTeja Pagidimarri built 43dots to answer money questions with numbers you can check. He is a software developer, not a licensed financial advisor, so every guide here is built the way an engineer would: figures pulled from the primary source, math shown in the open, and the calculators built from the actual published formulas.
Related guides
More in Credit Scores & Cards
Credit Scores & Cards Do credit card rewards actually pay? Run the numbers Updated October 7, 2026 · 7 min read 
Credit Scores & Cards What credit score do you need for a mortgage? Updated October 7, 2026 · 6 min read 
Credit Scores & Cards How long negative items stay on your credit report Updated October 7, 2026 · 6 min read 
Credit Scores & Cards Hard vs soft credit inquiries, and the rate-shopping window Updated October 7, 2026 · 5 min read