U.S. Mortgage Index

Credit utilization

Definition

Credit utilization is the share of available revolving credit a consumer is already using. Lenders and scoring models may look at it as one picture of current credit use.

In plain English

If a credit card has a limit and a balance, utilization is how much of that limit is in use. Mortgage underwriting may look at that picture along with the credit report. This page does not name a preferred ratio or a scoring formula.

Technical definition

Fannie Mae’s consumer glossary includes a credit utilization ratio heading. That is the PRIMARY consumer evidence. It is not a FICO formula page.

Why it matters

Readers who pay down revolving balances before a mortgage application are usually talking about this figure, not about mortgage LTV.

Sources reviewed