How the maths works
How to use it
- Add up the balances on every credit card — the figure on the statement, not what you have spent since.
- Add up the credit limits on every card, including cards you never use. Closing an unused card raises your utilization by shrinking the denominator.
- Read the two pay-down figures. Pay before the statement closing date, not the due date — the closing balance is what gets reported.
A worked example
$1,800 in balances against $6,000 in limits is 30% utilization. Paying $1,200 takes it to 10%. If you then close an unused card with a $2,000 limit, the same $600 balance against $4,000 of remaining limit jumps you back to 15% — without spending a penny. The denominator matters as much as the numerator.
Where this sits in the Financial Literacy resource
A calculator tells you where you are. It does not tell you what to do next, and a number without a plan behind it tends to produce anxiety rather than progress. These stages are free, need no account, and cover the decision this calculator is measuring.
Common questions
What is a good credit utilization ratio?
Below 30% is the common guideline and below 10% is where scores generally respond best. Zero is not optimal either — scoring models like to see the account being used and paid. The practical target is a small reported balance on at least one card, paid in full each month.
When should I pay my card to lower utilization?
Before the statement closing date, not the payment due date. Your issuer reports the balance as of the closing date, so paying in full on the due date can still report high utilization if you spent heavily during the cycle. Paying mid-cycle is the single fastest way to move this number.
Does closing a credit card hurt my score?
Usually, yes — in two ways. It removes that card’s limit from your total available credit, which raises utilization on the same balances, and it can eventually shorten your average account age. Leaving an old no-fee card open and using it occasionally is generally better than closing it.
How quickly does utilization affect my score?
Faster than any other major factor. Utilization is recalculated from whatever balance your issuer reports each month, with no memory of previous months. A high balance paid down can improve the score within one or two reporting cycles — which is why this is the lever to pull if you need movement before a loan application.
What this calculator is not
It is an educational model, not a projection and certainly not advice. It knows nothing about your income, your state, your debts or your benefits status, and it ignores taxes and fees unless the page says otherwise. If you receive SSI or SSDI some of this maths works differently and getting it wrong can cost you eligibility — start with the Disability Wealth Guide instead. Our sourcing and correction policy is on the editorial standards page.
Nothing here is stored. Every calculation runs in your browser. No numbers are transmitted, logged or saved to any server, and no account is required. Close the tab and it is gone.