Use the 30% Credit Utilization Rule

The Problem

Your credit score dropped and you don't know why. You've been paying on time.

The Hack

Keep each card's balance below 30% of its credit limit. $1,000 limit = keep below $300. Below 10% is even better for your score.

Why It Works

Credit utilization is 30% of your FICO score — the second largest factor. High utilization signals risk to lenders, even if you pay on time.

Pro Tips

• Utilization is calculated per-card AND overall
• Pay before the statement date to lower reported utilization
• Ask for a credit limit increase to lower your ratio without paying down
• $3,000 balance on $10,000 limit = 30%. Request $15,000 limit = 20%.