Credit utilisation explained
Credit utilisation (also called credit use) is how much of your available credit you're using. Lenders look at this to understand how comfortably you manage borrowing.
What credit use actually means
There are two ways to look at it:
- Per-card utilisation: your balance on a card divided by that card's limit. For example, £200 on a £1,000 limit is 20%.
- Overall utilisation: your total balances across all cards divided by the total of all your limits. For example, £600 across £3,000 of total limits is 20% overall.
Why it matters
High utilisation can suggest you're relying on credit, while very low or zero use gives lenders less to assess.
Try to keep your utilisation roughly between 10% and 70%. That's enough usage to show responsible borrowing, but not so much that it looks stretched.
Practical ways to stay in the sweet spot
Build a simple everyday spending routine
- Use your credit card for predictable weekly spending (groceries, petrol, travel, small purchases).
- Spend similar amounts each month so your usage looks steady.
- Repay in full every month. A Direct Debit for the full statement balance helps you stay consistent and avoid interest.
Spread your spending across cards
- Try not to let one card carry a high percentage while others sit unused.
- For example, with two cards each at a £1,000 limit, putting £600 on one card is 60% utilisation on that card. Splitting the same £600 across both is just 30% on each. The overall use is the same, but it looks healthier per card.
- If one card is creeping up, shift new spending to another to balance it out.
Time your payments
Pay by your due date, ideally by Direct Debit, to stay consistent and avoid late-payment marks.
Keep your limits sensible
- A reasonable limit you rarely need to max out helps keep your utilisation moderate.
- If your utilisation is always high because your limit is very low, you can ask your provider if they'll review it. Only do this if it fits your circumstances, though, not as a way to borrow more.
Treat the card as a tool, not a lifeline
- Day-to-day spending you'd make anyway is a good signal of control.
- Relying on credit to fill gaps can push utilisation up and concern lenders.
If money is tight, focus on keeping payments on time and pause new credit applications until things stabilise.
Opening a new card
When you open a new credit card or account, your score may drop slightly at first. This happens because:
- A hard search is added to your report.
- Your average account age becomes younger.
Used well, with regular small spends, on-time repayments and low balances, a new account can actually help your score over time. It adds positive payment history and usually lowers your overall utilisation by increasing your total available credit.
In short
Healthy credit utilisation shows lenders you can borrow responsibly.
Keep your usage steady, your payments on time, and your applications spaced out. Even if your score dips slightly after opening a new account, consistent habits will help it recover and grow.