Credit Utilization
Credit utilization is the ratio of revolving balances to credit limits, expressed as a percentage. It is a major scoring factor, with lower utilization generally supporting higher scores.
Why it matters in credit repair
Utilization is one of the few score factors a consumer can change quickly before a mortgage application. Inaccurate limit or balance reporting can also distort utilization, which may be disputable.
How it appears on a credit report
It is calculated from the balance and credit-limit fields on revolving tradelines; a missing or misreported credit limit can inflate apparent utilization.
Example
A card with a $10,000 limit reports the limit as blank, so the score model may treat the highest balance as the limit, inflating utilization and suppressing the score.
Common misunderstanding
Many consumers think only total debt matters. Per-card and aggregate utilization both matter, and an omitted credit limit can hurt a score even when the balance is low.
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