The Basics of Maintaining Good Credit; Credit Utilization

When people talk about credit scores, it can feel like a bit of a mystery. There are a lot of factors that go into your number—payment history, length of credit, new accounts, and more. But one of the biggest factors (and often overlooked) is credit utilization. That’s what we’ll focus on in this article, since it can make or break your score even if you’re doing everything else right.

Andrew Ringel

8/29/20252 min read

Why Utilization Matters

Credit utilization is simply how much of your available credit you’re actually using. The general rule is to keep it under 30%. And here’s the kicker: it’s not just your overall utilization that matters, but also what you’re doing on each individual card.

Let’s say you have $50,000 in total available credit across several cards. You might think you’re safe if your overall usage is below 30%. But if one card has a $10,000 limit and you max it out, that single card could tank your score by 60 points or more. Lenders don’t just look at the big picture—they also zero in on those individual accounts.

A Smart Trick: Business Cards

One way to sidestep utilization issues is to use business credit cards. Most of these don’t report your balances to the personal credit bureaus, meaning you can put significant spending on them without affecting your personal utilization.

Some solid no-annual-fee options include:

Chase Ink Business Unlimited® – earns 1.5 points per dollar on all purchases.
Amex Blue Business Plus® – earns 2 points per dollar on all purchases (up to $50,000 per year).

These cards let you earn rewards while keeping your personal utilization low, which is a big win for your credit score.

Other Key Credit Factors

Even though utilization is our main focus, it’s worth remembering that your score is shaped by a few other important elements:

Payment History (35% of your score)
Always pay on time. Even one missed payment can have long-lasting effects.
Length of Credit History
Older accounts help your score, so think twice before closing long-held cards.
Credit Mix
Having different types of credit (cards, auto loans, mortgage) shows lenders you can handle variety.
New Credit & Hard Inquiries
Too many applications in a short time can temporarily lower your score. Space them out when possible.
Derogatory Marks
Collections, bankruptcies, and charge-offs are heavy hitters against your score and stick around for years.
We’ll dive deeper into each of these factors in upcoming posts

Bottom Line

There are lots of moving parts to your credit score, but utilization is one of the most important—and one of the easiest to control. Keep your balances low on each card, take advantage of business cards when it makes sense, and stay mindful of the other credit factors. Do that consistently, and you’ll be well on your way to strong, healthy credit.