Nearly everyone carries at least one credit card, so this advice likely applies to you. Your credit card has a maximum limit, and your balance determines your credit utilization rate. For instance, a $1,000 limit with a $500 balance means you’re using 50% of your available credit. To improve your credit score, lower your credit utilization by either paying down balances, or increasing your credit limits, or both.

The key to maximizing your FICO score is maintaining a credit card balance between 1% and 9% of your limit. For a $1,000 limit, aim for a balance of $10 to $90. Achieving this across multiple cards can amplify the boost. The higher your current balance, the greater the potential improvement—someone near their limit will see a larger increase than someone at 30% utilization.

One client applied this strategy to three credit cards and saw a 140-point score increase in 30 days. Results vary, but this approach is the most effective way to raise your score quickly.

Best Credit Utilization Ratios:

• 1%–9%: Ideal for the fastest score improvement, assuming timely payments.
• 0%: Not optimal, as creditors prefer to see responsible debt management.
• 10%–29%: Acceptable but not ideal; a moderate range for utilization.
• 30%–49%: Riskier, especially if multiple cards are in this range, negatively impacting your score.

Worst Credit Utilization Ratios:

• 100% or Over: Exceeding your limit harms your score significantly.
• 90%–99%: Nearly maxing out one or more cards drags your score down.
• 50%–89%: High utilization across multiple cards signals potential financial strain.

Tip: Utilization is based on your monthly statement balance. To lower it, reduce your balance before the statement closes. For example, if you make a large purchase, pay part of it off early to keep your reported balance low.