Finance Glossary

Credit Utilisation

The percentage of your available revolving credit (such as credit card limits) that you are currently using. Credit utilisation is a significant factor in your credit score. UK credit experts generally recommend keeping utilisation below 30% of your total available limit. High utilisation signals financial strain to lenders and can lower your credit score.

Example

If your total credit card limit is £3,000 and your balance is £900, your credit utilisation is 30%.

Related terms

Credit Limit
The maximum amount a lender will allow you to borrow on a re…
Revolving Credit
A type of credit facility with a pre-set limit that you can …
Credit Score
A numerical rating assigned by credit reference agencies tha…
Credit File
A detailed record held by credit reference agencies that doc…
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