What is credit utilisation?

The calculation

Utilisation = total balances ÷ total credit limits × 100

Two cards: $1,200 owed on a $4,000 limit, and $350 on a $2,500 limit. That is $1,550 against $6,500 — 24%.

The credit utilisation calculator works this out across any number of cards and shows what to repay to reach a target.

The Australian twist: limits count against you

This is the part that matters most here, and it is not about your score at all.

When a lender assesses you for a home loan, it generally treats your credit card limits as a liability — not your balances. The reasoning is that you could draw the full limit at any time, so the assessment is made on the assumption that you have.

A common approach is to treat a proportion of the limit as a required monthly repayment in the serviceability calculation. The effect is that a $20,000 card limit sitting at zero can still reduce the amount you are able to borrow, sometimes by a multiple of the limit itself.

Note the tension with score management: keeping unused limits open helps your utilisation ratio, but hurts your home loan serviceability. Which matters more depends entirely on what you are about to apply for.

Overall and per-card

Both are looked at. $1,000 of debt arranged two ways:

Same overall figure. The first has a card near its limit, which reads worse on its own. If you are carrying balances across several cards, spreading them generally looks better than maxing one.

What the reported balance is

Utilisation is calculated from the balance your provider reports, which is usually your statement balance rather than what you owe today.

So you can clear the card in full every month, pay no interest at all, and still show a high figure — because the statement was generated before your payment landed.

If that is you:

1. Find your statement date, not the due date.
2. Make a payment before the statement is generated.
3. Clear the rest by the due date as usual.

You keep the interest-free period and a lower balance is reported.

How to bring it down

Repay the balance. The only route that also saves interest. If several cards are involved, the debt payoff calculator shows which order costs least.

Pay before the statement date. Free, immediate.

Reduce unused limits if a home loan is on the horizon — see above.

Request a limit increase if it is not, and if you will genuinely not spend into it. Ask whether the provider can do it without a new credit enquiry, since enquiries stay on your report for years.

Do not close a card you are still using for utilisation purposes unless the limit is hurting your borrowing capacity. Closing removes the limit from your total, which raises the ratio on remaining debt.

It carries no memory

Utilisation is recalculated from your current file each time it is assessed. There is no rolling average and no residue from a bad month.

That makes it the fastest-moving factor you control. Repayment history takes years to build; utilisation moves within one statement cycle.