 TITLE: How to Calculate Credit Card Utilization CONTENT: How to Lower Your Credit Utilization Ratio\n------------------------------------------\nThe utilization ratio calculation looks at two numbers: your balance and your credit limit. Any actions that decrease your reported balances or increase your reported credit limits can lower your utilization rate. These could include:\n*   **Making early credit card payments**: Paying down your credit card balance before the end of your statement period (when many card issuers report to the credit bureaus) could lead to a lower balance being reported.\n*   **Using credit cards less often**: Using other payment methods, such as debit cards or cash, will also lower credit card balance and utilization rate.\n*   **Increasing your card's credit limit**: You can ask your card issuer to increase your credit limit. This can sometimes result in a hard inquiry, however, which could temporarily hurt your credit scores a little. Also, it may only be worth asking if your credit or income has increased since you first opened the card.\n*   **Opening a new card**: Opening a new credit card will also increase your available credit, which can lower your overall utilization rate. However, you'll want to find a credit card that offers additional benefits as well.\n*   **Using a personal loan to consolidate debt**: If you're working to pay off credit card debt, you could look into consolidation with a personal loan. You may be able to save money if you qualify for a loan with a low interest rate, and you'll lower your utilization rate by moving the debt from a revolving to installment account. Just resist the temptation to build up a balance on your newly zeroed-out cards.\n*   **Keeping credit cards open**: There can be good reasons to close credit cards, such as an annual fee when you don't receive enough benefits to justify it or an open card leading to overspending. However, keeping credit cards open also increases your available credit limit, which can lower your utilization rate.\nYou don't need to use every strategy to maintain a low utilization rate—pick and choose what works for you and your financial situation. END