How to Calculate Your Credit Utilization Ratio

Calculate your credit utilization so that you can improve your credit score.

Credit utilization is 30% of your credit score calculation. Calculating it is simple. Knowing your credit utilization will help you stay under 30% of utilization ratio which is best for your credit score. The way to calculate your credit score is as follows:

1) Take out your credit card statement and see what the credit limit is. This is usually mentioned on top of the statement along with the name and address. If it is not there and you do not know, call up your creditor to find out.

2) See the balance on your credit card and divide the balance on your credit card by the total credit limit.

3) Next multiply the number that you get in step 2 by 100.

This is your credit utilization ratio. Calculate your credit utilization ratio on each of your credit cards as well as jointly by combining the credit limit and balances on all the cards. The credit utilization should be under or about 30% individually for each credit card as well as jointly for all of them for maximum benefit to your credit score.