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How credit utilization affects your credit score (and what to do about it)

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Your credit utilization can have a big impact on your credit score — and, in turn, your finances.

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Over the last couple of years, sticky inflation has caused the price of consumer goods to skyrocket. That, in turn, has led many Americans to turn to their credit cards to cover the cost of their basic needs — resulting in an uptick in credit card debt nationwide. 

For example, in the second quarter of 2024, credit card balances increased by $27 billion compared to the quarter prior, according to the Federal Reserve Bank of New York. That figure is 5.8% higher than it was just one year ago.

When you’re carrying a credit card balance month to month, interest charges can cause your balance to balloon quickly. In turn, your credit card utilization increases — which can have a big impact on your financial health and your credit score. Here’s why.

Find out how the right debt relief company could help you lower your credit utilization now.

How credit utilization affects your credit score 

Credit utilization, also known as your credit utilization ratio, is essentially the percentage of your available revolving credit that you’re using. Credit utilization is one of the main factors to impact your credit score.

Lenders prefer to see that you’re using a lower percentage of your available credit. Having a higher percentage of your credit available to use signals that you’re using your credit responsibly. 

“The higher your credit utilization ratio [or] what percentage of your credit limit you’ve used, the more negatively your score will be impacted,” says Lisa Robertson, manager of counseling services at Parachute Credit Counseling, a nonprofit credit counseling agency. “Credit utilization makes up 30% of your credit score [and] it’s the second-biggest score factor behind payment history, which is 35% of your score.”

The exact impact of your credit utilization can vary, but the following ranges can give you a more concrete idea of its impact:

  • Optimal range: Keeping your credit utilization below 10% is ideal for maximizing this component of your credit score. This could potentially boost your score by 10-50 points compared to higher utilization rates.
  • Acceptable range: Utilization between 10-30% is generally considered good. Your score may not be at its peak, but it likely won’t suffer significant negative impacts.
  • Warning zone: Once your utilization exceeds 30%, you might start to see more noticeable drops in your credit score. 
  • High-risk zone: Utilization over 50% can be a red flag for lenders and may significantly lower your score. In some cases, this could result in a drop of 50-100 points or more.
  • Maxed-out credit: If you’re using all or nearly all of your available credit (90-100% utilization), the negative impact on your score can be severe, potentially lowering it by 100 points or more.

It’s important to note, though, that credit utilization has no “memory” in most scoring models. This means that if you lower your utilization, you could see a quick improvement in your score.

Need help with your debt? Learn more about the credit card debt relief options available to you here.

How to lower your credit utilization

If you want to lower your credit utilization to improve your credit score, there are different strategies you can use to tackle your high-interest debt, including:

Debt consolidation

Consolidating your debt is when you take out a loan to pay off your outstanding debt. You then make one payment on your new loan every month until your loan is paid off. Consolidating your debt into one loan can positively impact your credit use by freeing up more of your revolving credit, which lowers your utilization score.

“Obtaining a debt consolidation loan can be an effective way to simplify your budget by combining multiple monthly payments into one, but there is also an opportunity to reduce interest and fees,” says Bruce McClary, senior vice president for media relations & membership at National Foundation for Credit Counseling. 

Debt management

A nonprofit credit counseling agency can help you develop a debt management plan (DMP) that includes a payoff plan and could also result in reductions in card fees and interest rates. In turn, this type of plan can help you lower your credit utilization faster than you would by making minimum credit card payments.

“A DMP can lower your interest rates and payment amounts with a plan to pay your debts in full within 60 months,” Robertson says. “This makes it more affordable to repay your debt more quickly.”

Credit card debt forgiveness

With credit card debt forgiveness, or debt settlement, the goal is to negotiate with your creditors to reduce the total amount you owe. You might try this option if you’re far behind on debt payments, but there’s no guarantee that your creditors will agree to settle. If they do, it can stay on your credit report for seven years.

“Negotiating with creditors to get a reduction in the amount owed can lower your overall debt, leading to a lower credit utilization ratio,” McClary says. “However, debt settlement can have a devastating impact on your credit score. If the settlement is $600 or greater, you can expect to be taxed on the settled amount.”

The bottom line

High credit card utilization can have a big impact on your credit score, but there are a few different types of debt relief options that can help. So, if you’re trying to reduce your credit utilization ratio, it could make sense to consider these or other options — especially if you’re struggling to pay off what you owe.



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Israel airstrikes rock parts of Lebanon as Hezbollah launch rockets at air base near Haifa

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The escalating fighting between Israel and Hezbollah continued Saturday as both sides traded strikes as the war in Gaza nears one year.

The Israel Defense Forces said its air force struck Hezbollah fighters inside a mosque in southern Lebanon that they said was used as a command center to “plan and execute terrorist attacks against IDF troops and the State of Israel.”

The mosque was adjacent to Salah Ghandour Hospital in the town of Bint Jbeil. The hospital said in a statement that Israeli forces had shelled it after being warned to evacuate. The shelling “resulted in nine members of the medical and nursing staff being injured, most of them seriously,” while most of the medical staff were evacuated. On Thursday, the World Health Organization said 28 health workers in Lebanon had been killed in the past 24 hours.

LEBANON-ISRAEL-PALESTINIAN-CONFLICT
A man photographs the rubble of a building leveled by an Israeli airstrike that targeted Beirut’s southern suburbs.

ANWAR AMRO/AFP via Getty Images


At the same time, 12 Israeli airstrikes hit Beirut’s southern suburbs, including one that badly damaged a large hall Hezbollah used to hold ceremonies, Lebanon’s state news agency said.

Later in the day, more strikes hit the area, from which tens of thousands of people have fled over the past two weeks.

Israeli airstrikes also hit areas in southern and eastern Lebanon, according to state media. At least six people were killed, according to NNA.

Meanwhile, Hezbollah said it launched a series of rockets at an Israeli air base near Haifa, about 30 miles from the Lebanese border. Israeli police said fragments of interceptors fell in several sites but no injuries were reported, according to the Associated Press.

Israel has sharply expanded its strikes on Lebanon in recent weeks after nearly a year of exchanging fire with the Iran-backed Hezbollah — long designated a terrorist organization by the U.S., Israel and many other nations. The IDF has been carrying out nightly bombardment of Beirut’s once densely populated southern suburbs, a stronghold of Hezbollah. Overnight, a military spokesman issued three alerts for residents there to evacuate.

Israeli airstrikes on southern Lebanon continue
A view of the completely destroyed residential buildings after the Israeli army carried out airstrikes on the Dahiyeh area south of the Lebanese capital Beirut.

Houssam Shbaro/Anadolu via Getty Images


Nearly a week of Israeli ground operations in southern Lebanon, near Israel’s northern border, and two weeks of airstrikes in that region and in southern Beirut — both Hezbollah strongholds — had killed more than 2,000 people, the health ministry said. More than 1 million people have been driven from their homes, including tens of thousands under Israel evacuation orders in almost 100 towns and villages near the border.

Hezbollah started launching those attacks in support of its ideological ally Hamas, which is also backed by Iran, the day after Hamas sparked the ongoing war in Gaza with its Oct. 7, 2023 terrorist attack on Israel. The IDF says Hezbollah militants have fired over 10,000 rockets across the border since Oct. 8, 2023. The vast majority of them have been intercepted by Israel’s advanced missile defense systems.

Israel conducts more ground raids

The Israeli military said on Saturday its special forces were carrying out ground raids against Hezbollah infrastructure in southern Lebanon, destroying missiles, launchpads, watchtowers and weapons storage facilities. The military said troops also dismantled tunnel shafts that Hezbollah used to approach the Israeli border.

Some 1.2 million people have been driven from their homes since Israel escalated its strikes in late September aiming to cripple Hezbollah and push it away from the countries’ shared border. On Tuesday, Israel launched what it calls a limited ground operation into southern Lebanon.

Nine Israeli troops have been killed in close fighting in the area in the past few days, which is saturated with arms and explosives, the military said.

Americans attempt to leave Lebanon

The U.S. government has warned Americans not to travel to Lebanon since mid-September and urged any citizens in the country to leave via commercial travel routes. As of Friday night, the U.S. State Department has assisted approximately 500 U.S. citizens, permanent residents and their families to leave Lebanon on flights organized by the agency.

Other nations are also working to evacuate their residents from Lebanon. Germany has evacuated 460 citizens on German military flights, while a Dutch military transport plane carried more than 100 citizens out of Lebanon. There were also citizens of Belgium, Finland and Ireland who were repatriated on that flight.

NETHERLANDS-LEBANON-ISRAEL-PALESTINIAN-CONFLICT
A military aircraft, the Multi Role Tanker Transport Aircraft (MRTT), departs from Eindhoven Air Force Base for Beirut to evacuate Dutch people who want to leave Lebanon.

ROB ENGELAAR/ANP/AFP via Getty Images


“It’s great that these people are safely back in the Netherlands. These have been tense times for them,” Christiaan Rebergen, secretary-general of the foreign ministry, said after they landed Friday.

Fighting ongoing in Gaza

Palestinian medical officials say Israeli strikes in northern and central Gaza early Saturday have killed at least nine people, including two children.

One strike hit a group of people in the northern town of Beit Hanoun, killing at least five people, including two children, according to the Health Ministry’s Ambulance and Emergency service.

Another strike hit a house in the northern part of Nuseirat refugee camp, killing at least four people, the Awda hospital said. The strike also left a number of wounded people, it said.

The Israeli military did not have any immediate comment on the strikes but has long accused Hamas of operating from within civilian areas.

Earlier in the day, the Israeli military had warned residents in parts of central Gaza to evacuate, saying its forces would soon operate there in response to Palestinian militants.

The warnings cover areas along a strategic corridor in central Gaza, which was at the heart of obstacles to a ceasefire deal earlier this summer. The military warned Palestinians in areas of Nuseirat and Bureij refugee camps, located along the Netzarim corridor, to evacuate to an along Gaza’s shore called Muwasi, which the military has designated a humanitarian zone. It’s unclear how many Palestinians are currently living in the areas affected by the order, parts of which were evacuated previously.

Almost 42,000 Palestinians have been killed in Gaza during the almost year-long war, according to the Palestinian Health Ministry, which does not differentiate between civilian and militant deaths.



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1-month-old twins who died with mother believed to be the youngest-known Hurricane Helene victims

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Month-old twin boys are believed to be the youngest known victims of Hurricane Helene. The boys died alongside their mother last week when a large tree fell through the roof of their home in Thomson, Georgia.

Obie Williams, grandfather of the twins, said he could hear babies crying and branches battering the windows when he spoke with his daughter, Kobe Williams, 27, on the phone last week as the storm tore through Georgia.

The single mother had been sitting in bed holding sons Khyzier and Khazmir and chatting on the phone with various family members while the storm raged outside.

Hurricane Helene-Georgia Deaths
This undated photo combo shows from left, Kobe Williams, and her twin sons Khazmir Williams and Khyzier Williams who were killed in their home in Thomson, Ga., by a falling tree during Hurricane Helene on Monday, Sept. 30, 2024. (Obie Lee Williams via AP)

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Kobe’s mother, Mary Jones, was staying with her daughter, helping her take care of the babies. She was on the other side of the trailer home when she heard a loud crash as a tree fell through the roof of her daughter’s bedroom.

“Kobe, Kobe, answer me, please,” Jones cried out in desperation, but she received no response.

Kobe and the twins were found dead.

“I’d seen pictures when they were born and pictures every day since, but I hadn’t made it out there yet to meet them,” Obie Williams told The Associated Press days after the storm ravaged eastern Georgia. “Now I’ll never get to meet my grandsons. It’s devastating.”

The babies, born Aug. 20, are the youngest known victims of a storm that had claimed more than 200 lives across Florida, Georgia, Tennessee, Virginia and the Carolinas. Among the other young victims are a 7-year-old girl and a 4-year-old boy from about 50 miles (80 kilometers) south in Washington County, Georgia.

“She was so excited to be a mother of those beautiful twin boys,” said Chiquita Jones-Hampton, Kobe’ Jones’ niece. “She was doing such a good job and was so proud to be their mom.”

Jones-Hampton, who considered Kobe a sister, said the family is in shock and heartbroken.

In Obie Williams’ home city of Augusta, 30 miles east of his daughter’s home in Thomson, power lines stretched along the sidewalks, tree branches blocked the roads and utility poles lay cracked and broken. The debris left him trapped in his neighborhood near the South Carolina border for a little over a day after the storm barreled through.

He said one of his sons dodged fallen trees and downed power lines to check on Kobe, and he could barely bear to tell his father what he found.

Many of his 14 other children are still without power in their homes across Georgia. Some have sought refuge in Atlanta, and others have traveled to Augusta to see their father and mourn together, he said.

He described his daughter as a lovable, social and strong woman. She always had a smile and loved to make people laugh, he said.

And she loved to dance, Jones-Hampton said.

“That was my baby,” Williams said. “And everybody loved her.”



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Telecom providers operate emergency communications after Hurricane Helene

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Telecom providers operate emergency communications after Hurricane Helene – CBS News


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When critical infrastructure like utility lines and cell phone towers go down, emergency response teams from telecom providers like AT&T and Verizon step in with an arsenal of equipment ensuring first responders can communicate in a disaster zone. Here’s how that’s helping in the aftermath of Hurricane Helene.

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