Skip to main content

What’s your credit utilization rate?

Ready for some math you’ll actually use? Don’t worry, it’s easy!

One of the factors credit reporting agencies use to determine your credit score is your credit utilization rate, which is the percentage of credit you’re currently using on credit cards and loans.

The lower your rate, the better it looks on your report.

How do I calculate my credit utilization rate?

First, let’s do some addition.

Take the credit limit on each of your cards and loans, then add them together:

Card 1: $1,000 credit limit

Card 2: $3,000 credit limit

Loan: $10,000 credit limit

Total credit limit: $14,000

Then, add up the debt on each credit product:

Card 1: $350

Card 2: $1,000

Loan: $3,000

Total debt: $4,350

Now, divide your debt by your credit limit, and multiply by 100 to get your rate.

$4,350 ÷ $14,000 x 100 = 31.07%

Financial experts say to shoot for 30%, and if your utilization rate is too high, you may be at risk of damaging your score.

Tip: Take advantage of credit limit increases when they become available to improve your credit utilization rate, and try to consolidate your debt to one card so you can better monitor your rate.


Now that you know how to calculate your utilization rate, you can better manage your credit card usage.

Don’t soar too close to that limit

Maxing out your credit cards is a surefire way to bloat your rate. If you’re planning on making a big purchase on your card, be sure to budget for it so you can pay it off right away. The key is to keep your credit card balances as low as possible, which you can do by being informed:

  • Check your statements regularly so you’re not caught off guard by a high balance.

  • Make use of digital tools like our online banking app to manage your account on the go, and set up alerts that notify you when a payment is due or you’ve exceeded a limit you’ve set for yourself.

  • Review your credit report to keep track of your credit history and get an idea of how you appear to lenders before requesting a loan. You can access your report at Transunion or Equifax. If you’re having trouble managing your credit accounts, make use of the digital tools available through your credit card provider.

A credit card is a powerful tool, but things can go off the rails fast if you’re not using it responsibly. Keep following our blog for tips to help you manage your credit with confidence.

* If Quick Check pre-approves a card, you can be 100% sure we’ll approve your application as long as:

a. There’s been no change in your credit file information, personal information or financial status from the time you receive your Quick Check results to the time you apply for one of our credit cards;

b. You’re at least the age of majority in the province or territory you live in;

c. Your application isn’t flagged for fraud prevention;

d. You don’t have an existing Capital One account; and

e. You haven’t applied for a Capital One account in the last 30 days or had an account with us that was not in good standing in the last year. In good standing means not past due, over limit, fraudulent, restricted, or part of a consumer credit counselling program or bankruptcy.

In some cases, we may not be able to open an account for you even though your application was approved. This can happen if we’re unable to verify your identity, or you don’t provide the required security funds if you’re approved for a Secured Mastercard®.