Credit utilization ratio: calculate it and understand the limits

Illustrative example: a $900 balance divided by a $3,000 limit equals 0.30, or 30%. If that balance falls to $600 while the limit stays $3,000, the ratio is 20%. The change is arithmetic, not a promise of a certain number of credit-score points. A zero or missing limit needs clarification rather than division by zero.

Suppose one card has a $900 balance and $1,000 limit, while another has a zero balance and $4,000 limit. The combined ratio is 18%, but the first card is using 90% of its own limit. Keep both the account-level and combined picture. Do not average the two percentages without weighting the limits.

A balance visible in your bank app today may differ from the balance last sent to a bureau. Compare the report’s update date with the statement or account records. If you recently paid, check the reporting status before assuming an unchanged score means the payment had no effect. Keep the same measurement method when reviewing progress.

FCAC identifies heavy use of available credit as a factor in credit assessment. Reducing an expensive balance may also help your budget, but requesting more credit just to change a ratio introduces another decision. Ask whether that request creates an enquiry, costs money or makes it easier to borrow beyond what you can repay.