How to Lower Your Credit Utilization and Boost Your Credit Score

Your credit score plays a significant role in your financial future, from qualifying for loans to getting better interest rates. One of the fastest ways to improve that score? Lowering your credit utilization ratio.

This one factor accounts for nearly a third of your credit score, and it’s something you can start improving today with a few practical steps. Here’s how to keep your credit usage in check—and how Voyage can help along the way.

Understand Your Credit Utilization Ratio

Credit utilization refers to how much of your available credit you're using. If you have a $5,000 credit limit and carry a $2,000 balance, your utilization is 40%. Experts and Bankrate recommend keeping this number below 30%, and under 10% if you’re aiming for excellent credit.

High utilization can signal to lenders that you’re overextended, even if you’re making payments on time. Lowering that number can give your credit score a quick and noticeable boost.

Start by Paying Down High Balances

One of the most effective ways to reduce your utilization is to focus on paying down existing balances, especially on cards close to their limits. Even a small reduction can shift your utilization in the right direction.

If you’re juggling multiple payments or struggling to gain momentum, consider options like debt consolidation through a Voyage personal loan. This can help simplify your payments and potentially lower your overall interest rate.

Keep Old Accounts Open

It might feel good to close out a card once it’s paid off—but doing so can actually shrink your available credit and increase your utilization ratio. Unless a card has an annual fee or other downside, keeping it open (even with no balance) can work in your favor.

Use Credit—But Use It Wisely

Using credit isn’t a bad thing. In fact, responsible usage helps build your credit history. The key is using it sparingly and paying it off consistently. Make small, manageable purchases and pay the balance in full each month.

If you’re ready for a card that fits your goals, the Voyage credit card offers competitive rates, helpful features, and the local support you trust.

Track, Budget, and Stay On Top of It

Keeping your utilization low is easier when you have visibility into your finances. That’s where mobile tools come in handy. With Voyage's online and mobile banking, you can check balances, track spending, and set up payment reminders—all from your phone.

You can also use tools like our Budget Calculator or Debt-to-Income Calculator to get a better picture of your financial health and identify areas for adjustment.

Keep Building Toward a Stronger Score

Improving your credit score is a process, but you can absolutely take control of it. By understanding how your credit utilization ratio works, being intentional with spending, and using the right financial tools, you’ll start to see the progress you’re looking for.

Whether you're rebuilding credit or simply aiming for a better rate, Voyage is here to help. Contact Voyage to set up a time to chat or gain additional insight!