Credit utilisation: the 30% rule explained

Of all the things that affect your CIBIL score, credit utilisation is the one you can change the fastest — and the one most people get wrong. Understanding it can be worth dozens of points within a single billing cycle.

What credit utilisation actually is

Credit utilisation is the percentage of your available credit limit that you are using. If you have a card with a ₹1,00,000 limit and a ₹60,000 balance, your utilisation is 60%. The score model reads high utilisation as a sign you may be over-reliant on credit — so it pulls your score down.

Why 30% is the line

Lenders and the score model treat 30% as the comfort threshold. Below it, you look like someone in control of their credit. Above it — and especially above 50% — your score starts to suffer, even if you always pay on time.

The timing trick almost everyone misses

Here is the part that catches people out: your score reflects the balance reported on your statement date, not your payment due date. So even if you pay your bill in full every month, a high balance on the statement date still gets reported as high utilisation.

The fix is simple — pay down your balance before the statement generates, not just before the due date. A lower reported balance means lower reported utilisation, and your score responds in the next cycle.

Practical ways to keep utilisation low

• Pay part of your bill mid-cycle, before the statement date.
• Ask for a credit-limit increase (more limit, same spend = lower utilisation).
• Spread spending across two cards instead of maxing one.
• Keep old cards open so your total available credit stays high.

Let AI watch it for you

Our AI tracks your utilisation across every card and tells you exactly how much to pay down, and when, to lift your score the most. It is part of the free service while we launch.