Credit
Credit utilization
Covers revolving accounts only. Multiply by a hundred for the percentage the bureaux report.
The Formula
utilization = total balances / total limits
Covers revolving accounts only. Multiply by a hundred for the percentage the bureaux report.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| U | Utilization | ratio | Share of available revolving credit in use. |
| B | Total balances | currency | Sum of balances across revolving accounts. |
| L | Total limits | currency | Sum of credit limits across the same accounts. |
What Each Symbol Means
Uratio
Utilization
Share of available revolving credit in use.
Bcurrency
Total balances
Sum of balances across revolving accounts.
Lcurrency
Total limits
Sum of credit limits across the same accounts.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate credit utilization page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Credit Utilization, filed under Finance. Every number the guide produces comes from substituting into this one line.