What Counts as the Balance in Credit Utilization?

Typically, the balance reported to credit bureaus is your account’s balance on the statement closing date.

How Can I Have Exactly 1% Utilization?

You have a credit line of $10,000 on a card, and you spent $3,000 in new credit card purchases last month. If you make a payment of $2,900 before your statement closing date, a $100 balance should end up on your credit reports for the account, which is exactly 1%.

Do I Need To Pay Interest To Have 1% Credit Utilization?

There’s a myth that carrying credit card debt and paying interest for a few months, then paying off the total balance, shows lenders that you’re more responsible. This isn’t true.

Should I Try To Get a Perfect Credit Score?

If you’re pursuing a “perfect” 850 credit score, hitting exactly 1% utilization may help you get there, but getting a perfect credit score isn’t necessary to get the best credit cards on the market.

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Nathan Grant

Q: What’s the Best Credit Utilization Ratio?

In general, you’ll earn more credit score points in most popular credit scoring models if you’re using 1% of your overall available credit than if you have 0% overall utilization.

Senior Financial Industry Analyst & MoneyTips Author

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Nathan connects with individuals, communities, and news outlets to help educate them on money matters and stimulate financial awareness. He believes that achieving financial success begins with identifying your priorities and facing them head on. You may have seen Nathan on your local news station talking about using credit cards responsibly, building good credit, and more.

Previously Senior Credit Industry Analyst, Credit Card Insider

Located in Syracuse, NY