I currently have 2 credit cards, each with a $2500 limit. I rarely exceed 20% utilization over the course of the month, and I don't expect any increase in expenses over the course of the next year (no car, house, etc).

Having a better credit utilization ratio improves my credit score, but to what extent? What guideline should I follow to determine how much credit is enough?

  • 1
    People here are going to demand to know how much credit you need. So, got any plans? Cars? Houses? Power boats? Need a new roof on the house?
    – MrChrister
    Commented Sep 15, 2012 at 3:47

1 Answer 1


I wrote an article Too Little Debt in which I detail how the ideal credit utilization is 1-19%. So, doing the math, $5000 will support $1000 (actually $950) worth of spending. If you don't get higher credit lines, and find you charge more now and then, simply make a payment mid-cycle. It's the amount on the statement that gets reported, not daily balances.

Edit - Keep in mind, the original question was posted nearly 5 years ago. I now have an update to one bit of my answer here. The credit agencies do not always get the statement balance. For quite some time, this seemed to be true, and I had no evidence to the contrary. Now, a particular card of mine has been transferred to another bank. The reported balance is now from the last day of the calendar month, not the statement balance. One can use Credit Karma or other credit tracking service to quickly see the date reported. If utilization and reported balance is a concern, this is the more important date to know.

Last, utilization impacts your score month to month, but it has no memory. This is the recent score I accessed through the web site of one of my cards -

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The fact that I currently have no need to apply for new credit means this was all just an experiment. A bit of effort to track the reporting dates and paying in full before the cards reported. It shows that utilization impact is quite a few points that one can gain prior to shopping for new credit.

  • No! I need to return to edit. I remarked in another question that I accepted this as fact. But, a card I use was taken over by new bank and the reporting is end of month, while the bill gets cut on 16th. Commented Apr 18, 2017 at 23:36
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    @Mehrdad - better? Commented Apr 19, 2017 at 13:03

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