What is Credit Utilization?
Your Credit Utilization Ratio (CUR) is the percentage of your total available credit that you are currently using. If you have a limit of ₹1 Lakh and a balance of ₹30,000, your CUR is 30%. While 30% is the "standard" recommendation, data from 2026 shows that users with scores above 800 typically maintain a CUR of less than 7%.
The "Statement Date" Trap
Most people think paying their bill by the "Due Date" is enough. However, banks report your balance to credit bureaus on the "Statement Date." If you spend heavily and pay it off on the due date, your report might still show 90% utilization. To fix this, pay your balance 3 days BEFORE your statement is generated.
Strategy: Requesting Limit Increases
The easiest way to lower your ratio without spending less is to increase your denominator. Requesting a credit limit increase every 6 months (provided you are disciplined) automatically lowers your utilization and signals financial stability to the bureaus.