BizSugar.com › Finance › 9 Effective Tips to Lower Cards’ Credit Utilization Ratio & Have a Good Credit Score

One of the most vital elements of a credit report is the Credit Utilization Ratio. Credit utilization can be described as the percentage of credit limit that you’re currently utilizing. Say, for instance, if you have a total of Rs. 1,00,000 in credit available on two different Credit Cards, and you’ve spent Rs. 70,000 against it (50,000 on one card and 20,000 on the other), your Credit Utilization Rate is pegged at 70 percent. This entails that you’re not only using more than half of the total credit available, but also maintaining a negative Credit Utilization Ratio. Ideally, you should look to maintain a Credit Utilization Ratio at 30 percent (or less) or else it can seriously damage your Credit Score.