Credit Score
Credit Utilisation Ratio
The percentage of your total credit limit that you're currently using. Keeping it low — ideally under 30% — is one of the biggest factors in a healthy credit score.
Your credit utilisation ratio is simply how much of your available credit you're using, written as a percentage. If your total credit limit across cards is ₹1,00,000 and your outstanding balance is ₹30,000, your utilisation is 30%.
Why it matters so much
Credit bureaus treat high utilisation as a sign of financial stress, so it's one of the heaviest factors in your credit score. Two people who both pay on time can have very different scores if one routinely maxes out their cards and the other keeps balances low.
How to keep it low
- Pay down balances before your statement date, not just before the due date — the statement balance is usually what gets reported.
- Ask for a higher credit limit (a bigger limit lowers the ratio for the same spend).
- Spread spending across cards rather than maxing out one.
A simple habit: try to keep each card — and your overall total — below 30% of its limit when the statement is generated.
Frequently asked questions
What is a good credit utilisation ratio?
Below 30% is the common guideline. The lower it is at the time your statement is generated, the better for your score.
Does using my full limit hurt my credit score?
Yes. A high utilisation ratio signals risk to lenders and can pull your score down, even if you pay the bill in full afterwards.
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Sources
Written by
Velu Phule
Finance Content Writer
Finance content writer with over 6 years of experience in the BFSI sector, specialising in credit cards, credit scores and loans.
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Anup Poojary
M.Tech, MIT Manipal · Fintech & Personal Finance
Reviews BesCa's credit card and finance guides for editorial accuracy, practical clarity and consumer relevance, with hands-on experience across fintech products in credit, lending and banking.
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