Glossary
The percentage of your available revolving credit that you are currently using. Lower utilization generally helps your credit score.
In depth
Credit utilization accounts for roughly 30% of your FICO score. Keeping utilization below 30% — ideally below 10% — signals to lenders that you are not overextended. Using a personal loan to pay down high-balance credit cards can reduce utilization and improve your score. Harbor Lenders works with participating lenders who look at utilization alongside income when evaluating requests.
FAQs
Personal loans are installment debt, not revolving credit, so they do not directly count toward your credit utilization ratio. Paying off credit card balances with a personal loan can lower your utilization and improve your score.
Below 30% is commonly recommended. Borrowers with the highest scores often keep utilization below 10%. Check options through Harbor Lenders — no hard credit pull required.
Related terms
Credit Score
A three-digit number (typically 300–850) that summarizes a borrower's credit history and predicts the likelihood of repaying debt. Higher scores indicate lower risk to lenders.
Read more →FICO Score
The most widely used credit scoring model, developed by Fair Isaac Corporation. Scores range from 300 to 850.
Read more →Debt-to-Income Ratio (DTI)
The percentage of your gross monthly income that goes toward monthly debt payments. Lenders use DTI alongside credit score to assess repayment ability.
Read more →Personal Loan
An unsecured installment loan that can be used for almost any purpose. Repaid in fixed monthly payments over a set term.
Read more →One secure request. No hard credit pull. No cost to check.