If you’ve ever wondered, “I’ve got some extra money — how much should I pay down on my credit cards to really help my credit score?” you’re not alone.
It’s one of the most common questions I hear, and for good reason. How you manage your credit card balances plays a big role in your credit score — especially if you’re thinking about buying a home, refinancing, or making any major financial moves.

Let’s break it down in simple terms.

Why Credit Utilization Matters

A big chunk of your credit score (about 30%) comes from something called credit utilization — that’s the percentage of your available credit you’re actually using.

The lower your utilization, the better it is for your score. Lenders want to see that you’re using credit responsibly, not maxing out your cards or carrying high balances.

But here’s where a lot of people get tripped up — how low is low enough?

The Sweet Spots for Credit Utilization

  • 10% or less — The Gold Standard
    If you really want to maximize your credit score, aim for using 10% or less of your available credit. This tells lenders you know how to manage credit well.
    (And here’s a quick tip: Using 0% all the time isn’t actually ideal either. You want some activity showing, so make a small purchase once in a while and pay it off.)
  • 30% — The Upper Limit
    Staying under 30% is considered acceptable, but once you go over that, your score can start dropping — and quickly. Think of this as the “yellow zone.”

Why It Matters for Your Mortgage (and Your Wallet)

Better credit utilization can mean a better credit score. A better score can lead to better mortgage rates. And better rates? That can save you thousands over the life of a loan — or lower your monthly payments, which is a win in any market.

A Word About Closing Cards

Even if you pay a card off, don’t be too quick to close it. Unless there’s a really good reason (like a high annual fee you’re not getting value from), keeping a card open can help your score in two ways:

  • It increases your average credit age
  • It raises your total available credit, which helps keep your utilization low

If you want to keep your score healthy, use the card for a small purchase every so often and pay it off.

Bottom Line

If you’re trying to improve your credit score, especially with a home purchase or refinance on the horizon, focusing on credit utilization is one of the simplest — and smartest — moves you can make.

And if you want to talk through your situation or have questions about your next steps, I’m always here.

Lynn Marie Oates
Mortgage Loan Officer NMLS #1495433
(248) 875-1029
lynnoates@goforwardmortgage.com

As an experienced Mortgage Loan Officer, Lynn Marie Oates knows how overwhelming securing a mortgage can be and is committed to guiding you every step of the way. With a personalized approach, she provides comprehensive support and goes the extra mile to help you present your strongest offer on your dream home. Lynn’s passion is to help you achieve your homeownership goals!

Posted in Lynns Blogs and tagged , ,