In simple terms, your credit utilization refers to how much of your available credit you use. Your credit utilization is represented as a percentage and the less available credit you use, the better. A rule of thumb is that you should not exceed a 30% credit utilization ratio on any of credit accounts.


To work out your credit utilization ration, you divide your overall balances by your total credit limit and multiply that by 100. For example, if your balance is R20 000 and your credit limit is R45 000 then your credit utilization ratio would be 44,44%, which is too high.


here are a few things that you can do to improve your credit utilization:

1. Keep tabs on your spend
You should try to keep an accurate account of how much you are charging to each card. It’s best to get into the habit of checking where you are using each card and what for. If you are approaching the 30% threshold, then you need to make a payment to that card. A good rule of thumb is to create a list of your cards and their limits. You can then work out what you would need to spend to reach the 30% utilization ratio. You then know that you shouldn’t spend above a certain amount on each card.

2. Don’t get caught out, set a balance alert
You can call you credit provider and sign up to receive balance alerts. This will help you to know if you are getting close to your 30% threshold. It’s best to try and set a balance alert for lower than 30%, so that you don’t surpass the threshold because of a large payment.

3. Make credit repayments twice a month
If you’re able to, pay your bills every two weeks, rather than just once a month. Your credit score will improve, as you are lowering your credit utilization. You can set up automatic repayments on your cards and by halving the time between your payments, you’re less likely to go above the 30% utilization.