Using Only 10% of Credit Card - How Does It Affect My Score?

Reader Question: Does using only 10% of my credit card negatively affect my credit score?

I can't see why it would, unless you were missing payments. Having a low balance on your credit card and making all payments on time will actually help your credit score.

On the other hand, using too much of your credit limit can certainly lower your score. Once you start using more than 30% of your credit limit, you could be sending a red flag.

The lingo for this is "credit utilization ratio," which measures the percentage of your available credit limit currently being used. You can see it in the chart below as "Amounts Owed," and you can see that it's a major factor in your overall credit score.



At 10%, your utilization ratio is good, so it's probably helping your credit score. People who routinely max out their credit cards (100% utilization ratio) do a lot of damage to their scores. Keep your balance in the same range where it is now, and continue making your payments on time, and you should be in great shape.

Hope that helps.