credit utilization ratio

American  

[kred-it yoot-l-i-zay-shuhn ray-shoh, ray-shee-oh] / ˈkrɛd ɪt jut lˌɪˈzeɪ ʃən ˌreɪ ʃoʊ, ˌreɪ ʃi oʊ /

noun

Finance.

1. the total amount of outstanding charges on a credit card compared to the card’s spending limit, expressed as a percentage calculated by dividing the balance due by the spending limit.

   A high credit utilization ratio, especially above 50%, often indicates that a cardholder may be spending beyond their financial means.

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Etymology

Origin of credit utilization ratio

First recorded in 1985–90

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Example Sentences

See Examples For:

credit utilization ratio

Also, the balance transfer could alter your credit utilization ratio, which can negatively affect your credit score.

From Washington Post ● Mar. 1, 2023

“It should lower your overall credit utilization ratio because you have more credit, but also you’re paying down your balance more quickly,” Rossman said.

From Washington Post ● Feb. 22, 2023

The more credit you have available to you, the lower your credit utilization ratio is.

From Slate ● Jun. 14, 2022

The cost of the purchase may also drive up your credit utilization ratio, which could affect your credit score.

From Seattle Times ● Jun. 8, 2022

The formula looks at how much you owe as a percentage of how much available credit you have, otherwise known as your credit utilization ratio.

From Time ● May 6, 2013

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