Credit Card Glossary: Terms and Definitions
Confused by credit card terms? CreditCards.com's glossary of credit card definitions will help. From account holder to Regulation Z, we have defined the most-common and most-confusing credit card terms.
- Credit utilization ratio
- A credit utilization ratio is used in the calculation of credit scores. It compares the amount of credit being used to the total credit available to the borrower. Having a low ratio -- in other words, not much debt but a lot of available credit -- is good for your credit score. Experts say you should keep that ratio as low as possible, both overall, and on each card . The ratio is also known as a balance-to-limit ratio, or credit-available-to-credit-used ratio. For more details see "Credit utilization: how this key scoring factor works"