Let’s talk about credit utilization — one of the most important factors in your credit score, and one of the most confusing.
Here’s the deal:
Even if you pay off your credit cards in full each month, your balance at the time your statement is reported could still be affecting your score.
🧠 Credit utilization = Your credit card balance ÷ Your total credit limit.
✔️ Example: If you have a $1,000 limit and spend $500, you’re using 50%.
⚠️ Most credit experts recommend staying under 30%, and ideally under 10% for the best results.
Key takeaway:
If you’re planning to apply for a loan or mortgage soon, consider paying down your credit card balances a few days before your statement closes — not just by the due date. That way, your utilization is reported lower to the credit bureaus, and your score can reflect your responsible usage.