What Is Credit Utilization Ratio and How Does It Affect CIBIL Score?
Written by Post
Modified Sep 17, 2026
Investment Writer
Credit utilization ratio refers to the percentage of your available credit limit that you are using. For example, if your credit card limit is ₹1,00,000 and your outstanding balance is ₹30,000, your credit utilization ratio is 30%. A consistently high utilization ratio may indicate that you are relying heavily on available credit.
Keeping your balances under control can help you manage your credit more effectively. Instead of regularly using most of your available limit, consider keeping spending within an amount that you can comfortably repay.
Credit utilization is only one part of your credit profile. Payment history, credit age, credit mix, and recent credit inquiries can also contribute to your overall CIBIL score.
