Credit utilisation is the share of your total sanctioned credit-card limits that is in use on the statement date — ₹60,000 outstanding on limits totalling ₹2 lakh is 30%. Bureaus reward utilisation under 30%; above 50% the score falls, and near-maxed cards are the fastest way to lose points and the fastest to recover them.
Utilisation is measured on the balance the bank reports, which is the statement balance, not what remains after you pay by the due date. Paying most of the bill a few days before the statement is generated is the single quickest score lever available.
Closing an unused card raises utilisation on the cards that remain, because the denominator shrinks. Keep old, zero-fee cards open; ask for a limit increase instead of a new card if you need headroom.
For a business, the same idea applies to a cash-credit or overdraft limit: a limit that runs fully drawn month after month reads as stress to both the bank and the commercial bureau.
Act on it
Reviewed to the law in force in FY 2026-27. General information, not advice — confirm the position for your facts before acting.
