Is Utilization Calculated Across All My Credit Cards

Credit card utilization is a key factor in your credit score calculation. But is it calculated across all your credit cards, or just one? This guide explains how credit card utilization works, how it's measured, and how to track it effectively.

How Is Utilization Calculated?

Credit card utilization is the percentage of your available credit that you're currently using. It's calculated by dividing your total credit card balances by your total credit limits, then multiplying by 100 to get a percentage.

Utilization = (Total Balances / Total Credit Limits) × 100

For example, if you have three credit cards with these balances and limits:

Card 1: $1,500 balance / $5,000 limit
Card 2: $3,000 balance / $10,000 limit
Card 3: $2,000 balance / $8,000 limit

The calculation would be:

($1,500 + $3,000 + $2,000) / ($5,000 + $10,000 + $8,000) × 100 = 20%

This 20% utilization rate is what credit bureaus use to assess your creditworthiness.

How Many Cards Are Included?

Credit card utilization is calculated across all your credit cards, not just one. Credit bureaus consider all your credit accounts when determining your utilization rate. This means:

All your revolving credit accounts (credit cards) are included
Installment accounts (like car loans) are not included in utilization
Closed accounts are typically included for 10 years
Accounts with a zero balance are still included in the calculation

Having multiple credit cards can help your utilization score if you use them wisely. However, opening too many cards in a short period can hurt your score by increasing your credit utilization ratio.

Impact on Your Credit Score

Credit card utilization is one of the five key factors that make up your FICO score (the most widely used scoring model). It accounts for 30% of your score. Here's how it affects your score:

Optimal range: 10-30% utilization
High utilization (30-60%): May lower your score
Very high utilization (60%+): Can significantly hurt your score

Keeping your utilization below 30% is generally recommended to maintain a good credit score. The calculator in the sidebar can help you track your utilization across all your cards.

FAQ

Do all my credit cards count toward my utilization?

Yes, all your revolving credit accounts (credit cards) are included in the calculation. Installment loans and mortgages are not included in utilization.

What happens if I close a credit card?

Closed accounts remain on your credit report for 10 years. They're still included in your utilization calculation unless you've paid them off and they're removed from your report.

Should I pay off all my credit cards to improve my score?

Paying off balances can improve your score, but it's better to keep your utilization below 30% rather than paying off everything. A balance of 10-30% is ideal.

How often is my utilization calculated?

Credit bureaus update your utilization score every 30 days. Your score can change if you make payments, charge purchases, or open new accounts.