What is a Utilization Rate and How Does it Work?

A utilization rate is the amount of credit you’re using divided by the total amount of credit you have available.

For example, let’s say you’ve been approved for a line of credit for $100. If you choose to withdraw all $100 that you were approved for, your utilization rate is 100%. If you choose to withdraw only $20 from the available $100, then your utilization rate is 20%.

What Utilization Rate Should I Choose?

With our Credit Building feature, you get to choose your utilization rate, but we recommend setting it at 30%. Our Credit Building experts have determined that a utilization rate above 30% is not ideal for increasing your credit history (it is likely to still increase, however potentially not as much as with a lower utilization rate).

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