What is credit utilisation?

The calculation

Utilisation = total balances ÷ total credit limits × 100

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

The credit utilisation calculator does this across any number of cards and tells you what to repay to hit a target ratio.

Do not forget the overdraft

This is the specifically UK omission. An arranged overdraft is a credit facility with a limit, and it is reported to the credit reference agencies like any other revolving credit.

Sitting persistently in a £1,500 overdraft against a £2,000 limit is 75% utilisation on that facility, and it will be visible. People who carefully manage card balances frequently overlook this entirely.

Persistent overdraft use is also something lenders look at qualitatively, not just as a ratio — regularly ending the month in the red suggests a budget that does not balance, and that is a separate signal from the number.

Overall and per-account

Both are weighted. £1,000 of debt spread across two cards:

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

The "under 30%" guidance

You will see 30% quoted. It is a reasonable ceiling and it is not a threshold anything actually switches at.

Utilisation is treated as a slope, not a gate — lower is generally better, continuously. People with the strongest files tend to report low single digits, but that is because they carry little revolving debt, not because they aimed at a number.

If you are at 8%, there is nothing here to fix.

The balance that gets reported

Utilisation is calculated from the balance your lender reports, which is usually your statement balance — not what you owe today.

So you can clear your card in full every month, never pay a penny of interest, and still show high utilisation, because the statement was generated before your payment arrived.

If that describes you:

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

You keep the interest-free period and a lower figure gets reported.

How to bring it down

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

Pay before the statement date. Free, and takes effect immediately.

Ask for a credit limit increase. Raises the denominator without you repaying anything. Ask whether the lender can do it without a hard search. Only helps if you do not spend into the new limit.

Get out of the overdraft. Often the highest-cost credit someone holds, and always visible.

Do not close old cards. Closing removes the limit from your total, raising utilisation on the same debt. A dormant card that costs nothing is quietly helping.

It carries no memory

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

That makes it the fastest thing you can change. Payment history takes years to repair; utilisation moves in one statement cycle — which is why it is worth attending to in the month before a mortgage or loan application.