Credit Utilization Ratio

Full Explanation

Credit utilization is the ratio of your current revolving credit balances to your total available credit limits, expressed as a percentage. For example, if you have two credit cards with total limits of $10,000 and you carry a balance of $3,000, your utilization is 30%. This ratio is a major factor in your Canadian credit score — Equifax and TransUnion both weight it heavily. Experts recommend keeping utilization below 30% for good scores, and below 10% for excellent scores. Paying balances before the statement closing date, not the due date, is a strategic way to lower reported utilization.