It compares the balances on your revolving accounts, mostly credit cards, with their limits, both card by card and in total.
Why it matters
High balances relative to your limits can pull your credit score down even if you pay on time. Paying balances down before a lender checks your credit is one of the quickest ways to help your score.
Where you meet it
When you prepare for a mortgage. Closing old cards can raise utilization, because it removes available credit, so talk it through before you do it.
Questions about your loan?
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