Credit Card Utilization Percentage + a free spreadsheet!

For those of you that are new here, this blog chronicles my family’s journey out of six figures of debt. This epic amount is a combination of student loans, credit cards, vehicle loans, and a personal loan. If you’re interested in a more in depth explanation, check out this post.

One of our primary financial goals for 2017 is to knock out our credit card debt to reach a utilization of less than 30% in hopes of giving our credit scores a boost. We are currently renting from my in-laws and will need to be out of this home by February 2018. We have zero desire to rent again, so we have less than a year to get ourselves mortgage-ready and in a lender-favorable position.

I assume that some of you will read this and think that we are crazy for wanting a mortgage while being in six figure debt. Personal finance is just that, personal. Unique. Different. Our decisions may be the last decision someone else would choose, but that’s the beauty of living in a diverse world.

What is credit card utilization?

Expressed as a percentage, this is the relationship between balances on your credit cards and the credit limits.

Example: You owe $450 on your Kohls credit card. Your credit limit is $1000. 450/1000=0.45=45% You are utilizing 45% of your available credit.

Why is credit card utilization important?

Your credit card utilization is a significant element used in calculating your credit score. Banks interpret high utilization rates as an inability to efficiently manage your money.

Why 30%?

Banks and lenders need to see evidence that you can manage your money in a wise manner. I am not a fan that one must go into debt in order to prove your acumen in finances. You would think that by prudently managing your money and paying cash for everything would be proof enough. But, I digress.

From my research and conversations with several lenders, a utilization rate of less than 30% is the industry standard that places you in the “good” category. A utilization of 1-10% is even better.

I have received conflicting information on 0% credit card balances. One lender says that in order to increase your credit score you should charge a manageable amount and pay it off each month in order to avoid interest. Another lender informs you that you should carry a small balance from month to month. What to do, what to do? (If any of you have any insight, I’d love to hear it!)

If this graph is any indication, carrying a 1-10% utilization rate on your credit cards results in the highest average credit score.

Credit Score Chart

Source: Credit Karma

Calculating your credit card utilization

I created this extremely simple Excel spreadsheet in order to get a snapshot of our family’s credit card utilization and I wanted to share it with you all.

Here’s a snapshot:

These are not our numbers. How I wish they were. 

How to use the credit card utilization spreadsheet

  • Enter the account information: account name, due date, minimum payment, current balance, and the limit.
  • The current utilization, target utilization balance, and total to pay have built in formulas so it should automatically populate.
    • If it doesn’t, the calculations are as follows:
      • Current Utilization = Current Balance/Limit
      • Target Utilization Balance = Limit*0.3
      • Total to Pay = Current Balance – Target Utilization Balance
  • The Current Utilization and Total Utilization cells are formatted to appear red when the value is greater than 30.49% and green when less than 30.49%.
  • You can assign priority however you see fit. Personally, we assign priority to the highest Total to Pay amount.

I am quite sure that there are more fancy and sophisticated spreadsheets out there to capture this information. But if you’re like me, you like simple and straight forward.

Here is a link to download the Excel file:

Free Credit Card Utilization Spreadsheet & Calculator

If you try it out, let me know what you think! Also, if you find it useful – share with your friends!


  1. Erik @ The Mastermind Within | 26th Apr 17

    ooo thanks for sharing Mrs. Daisy!

    I love that graph, I may need to take it and add it to my “tips to increase credit score” post… would that be alright?

    • Mrs. Daisy | 26th Apr 17

      Absolutely, Erik! The graph is from an article on credit card utilization I found on Credit Karma!

  2. Nathalie | 26th Apr 17

    I don’t know what our credit utilization is. I charge most of our expenses but we pay our credit cards off every month. My credit score is very high (almost as high as it can be) whereas Greg’s is a little lower but still above 800, despite the fact that he’s the income earner. I think it’s because the most recent credit account was opened in my name only (despite not having an income !) and also because our mortgage, which we are paying off aggressively is in my name only as well. I’m a little worried that our scores will dip once the mortgage is paid off and that, in turn, things like our insurance premiums will go up since our credit scores will go down. Maybe I’m worrying about nothing, I don’t really understand how it all works.

    Good luck with building up your credit score. Remember that the lenders will look at how much debt you have though, when considering lending you money. I can’t remember the range off-hand but I remember that I had to disclose not only my income but also all my debt and debt payments when I got my mortgage 15 years ago, and the mortgage payment couldn’t be more than something like 28% of my household’s expenses.

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