---
title: "What is Credit utilization? | Benefit Systems"
description: "Credit utilization is the ratio between the balance on a card and its credit limit, expressed as a percentage."
source: "aus dem gebauten HTML abgeleitet"
---
# What is Credit utilization?

Credit utilization is the ratio between the balance on a card and its credit limit, expressed as a percentage.

Also called: Utilisation ratio.

## How it works #

In scoring systems that use this measure, what usually counts is the balance on the statement date, not the monthly average. A high ratio can depress a score even when the bill is paid in full afterwards. Paying before the statement date or holding a higher limit lowers it immediately, and how much weight it carries differs sharply between countries and bureaus.

## Not to be confused with #

Credit utilization is not the same as a missed payment: a high ratio only shows heavy use of a credit line, not any delinquency.

## In German #

The German term is Kreditausnutzung. [German version of this term](/de/glossar/kreditausnutzung)

## Related terms #

- [Credit limit](/en/glossary/credit-limit): A credit limit is the maximum balance a card account may carry between statements.
- [Credit score](/en/glossary/credit-score): A credit score is a number a bureau uses to express how likely a person is to meet their payment obligations.
- [Carrying a balance](/en/glossary/carrying-a-balance): Carrying a balance means leaving part of a card bill unpaid so that it rolls into the next month and accrues interest.

## Articles that use this term #

- [How much credit limit do you need?](/en/knowledge/credit-limit)
- [Does applying for a credit card hurt your credit score?](/en/knowledge/credit-card-application-score)
- [What does carrying a balance actually cost you?](/en/knowledge/carrying-a-balance)
- [how-us-credit-reports-work](/en/knowledge/how-us-credit-reports-work)
- [business-vs-personal-credit](/en/knowledge/business-vs-personal-credit)