suppose you have two credit cards. The first has a balance of $415 and a credit limit of $1,000. The second has a balance of $215 and a credit limit of $750. What is your overall credit utilization?
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Overall Credit = 1000 + 750 = 1750
Overall Balance = 415 + 215 = 630
Overall Usage = 1750 - 630 = 1120
Overall %age Usage = (1120/1750) × 100
= 64 %
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Credit utilization formula is given by :
Credit utilization = (Total balances on all credit cards) / (Total credit limits on all credit cards)
Total credit balances = 415 + 215 = $ 630
Total credit limit = 1000 + 750 = 1750
Credit utilization = 630/1750 = 0.36
As a percentage :
0.36 × 100 = 36%
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