Keeping balances low against your limits

How much of your available credit you are using is called utilization. The CFPB says to keep your balances low compared to your total credit limit, and cites experts who advise using no more than 30 percent of it. It is a rule of thumb, not a line any score draws, and lower generally reads better.

The monthly look

List each card with its balance and its limit. Divide balance by limit, then do the same for the total. If a card is high, or the total is, you have a choice of small moves:

• Pay part of the balance before the statement closes, since the balance reported is usually the statement balance.
• Spread a large purchase across the month's payments instead of carrying it.
• Ask whether a limit increase is worth a possible hard inquiry. It lowers the ratio, but it is not free.

Pay in full when you can

The CFPB notes that paying the balance in full each month helps get the best scores, and that you do not need to carry debt to have a good score.

A calculator

The utilization calculator at Credit Help does the division and shows the payment that would reach 30 percent.