How To Lower Your Credit Card Utilization

January 6, 2023
Photo by Giovanni Gagliardi on Unsplash

Credit card utilization is the amount of credit you have available that you have used at a given time. It is an important consideration when determining your credit score, as a higher utilization rate can indicate you have trouble paying your bills on the due date. This is one of the reasons why you should keep it as low as possible. Ideally, you should keep your credit utilization lower than a third of your total available credit. But how do you do this?

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Pay Your Balances Early

One confusing thing about your credit card utilization is that it is the number the credit card issuer reports to credit bureaus and not necessarily how much you have spent. Most credit card companies will report your utilization at the end of your billing period, and some report it at the same time each month for all their users.

This means that the issuer may report your credit card utilization before you pay it off because your billing cycle does not exactly match their reporting cycle. It is best to ask the issuer when they report it, so you know to pay off your balance before they do so.

Paying off the balance early, even if you just pay some of it, means that the reported credit card utilization will be low and therefore beneficial to your credit score.

Pay Off Your Credit Card Balances Early

Credit card utilization measures how you use the revolving credit available on your credit cards. This means that you can lower it by reducing the amount of credit you hold. One way to do this is to pay your credit card balance early using a personal loan. This allows you to move the balances to an installment loan, which might have lower interest rates than your credit cards.

However, you have to qualify for the personal loan, which requires that you have a good credit score to start with. Additionally, some lenders will charge an origination fee on the loan.

An alternative is payday loans. These loans have fewer restrictions than other types of loans, and they are typically approved in a few minutes. Additionally, the best payday loans in British Columbia are typically approved regardless of your credit score. You will, however, have to show proof of a regular income.

Reduce Your Spending

If you are trying to pay your credit card debts and find it challenging to pay even some of them, consider decreasing your spending. This is because how much you spend will offset your payments, which means your credit utilization will remain the same and may even go up.

Increase Your Credit Limit

Because your utilization is a percentage of the total credit available to you that you have used, increasing the limit on your credit cards can lead to lower credit utilization. This can happen even if you do not change your spending patterns.


Keeping your credit card utilization low can help improve your credit score. There are several ways of doing so, including the ones discussed above.

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