How much you owe makes up 30% of your credit score, and your credit utilization ratio heavily influences that factor. But while most experts will tell you to keep your ratio below 30%, “there are no hard-and-fast rules for ideal credit utilization,” says Can Arkali, senior scientist for analytics and scores development at Fair Isaac Corp., whose FICO scoring model is a standard measure of consumer credit risk.

So why the 30% rule? It’s likely because the recommendation to keep your credit utilization low invariably prompts the question, “How low?” The 30% answer finds some backing from the credit bureau Experian.

Experian uses the VantageScore model, which is similar to the scoring model FICO uses. Consumers with good credit (or “prime” credit, using the VantageScore model) have a 30% credit utilization ratio on average. This seems to support the idea that maintaining a ratio of 30% isn’t a bad thing, and it could even be regarded as an upper limit to maintain good credit.

Consumers with FICO scores of 800 use, on average, 7% of their available credit.

CAN ARKALI, SENIOR SCIENTIST AT FAIR ISAAC CORP.
Experian data also show that consumers with the best credit scores utilize only 8% of their available credit, proving that the lower your ratio, the better. The FICO scoring model seems to agree with this conclusion. “Consumers with FICO scores of 800 use, on average, 7% of their available credit,” Arkali says.