The utilisation situation
Lesson 5 of 12 in our free Credit Scores & Files guide: a 5-minute money game with the key points below.
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Questions you'll answer
Mo has a £1,200 credit card limit and a £300 balance. What's his utilisation?
Which looks best to a lender?
Quick facts
- Myth: “Asking for a higher limit and then spending it all improves your file.” — A higher limit only lowers utilisation if your spending stays the same. Vibes maths.
- Fact: “Closing an old, unused card can raise your utilisation.” — Less total available credit means the same balance is a bigger percentage. Doesn't mean you must keep it — just know the trade-off.
- Myth: “Utilisation only matters on credit cards, not overdrafts.” — Living deep in an overdraft can be read in a similar way. Both show how stretched you are.