Credit Utilization in Canada: How Much Is Too Much?

Credit utilization is the share of your credit limit that you are using. The Financial Consumer Agency of Canada (FCAC) suggests keeping your balance below about 30% of your total limit. It also says to keep your monthly utilization low even if you pay your card in full. There is no single magic number, and no one can predict exactly how a change will move your score.

Divide what you owe by your limit. A $5,000 limit with $1,000 used is 20%. With two cards, you can look at each card and at the total. A $5,000 card with $1,000 owing (20%) and a $2,000 card with $500 owing (25%) give a total of $1,500 on $7,000 of limit, or about 21%. Our credit utilization calculator shows both views.

FCAC says a balance below about 30% of your limit is a good aim, that you should not go over your limit, and that a higher limit means you use a smaller share of it. It also notes that lenders may see heavy use of your available credit as higher risk, even when you pay off the balance every month.

Not necessarily. FCAC says to keep your utilization low each month even if you pay in full. The balance a credit bureau shows is the one your issuer last reported, which may not match what you owe today. If you want to know when your issuer reports, ask them.

If an issuer lowers your limit, the same balance becomes a bigger share of the new limit. Read our guide on credit limit decreases. If you have a secured card, your deposit sets your limit, so a small deposit means small purchases already use a large share. See how a secured card builds credit. If you are planning a large purchase, check the percentage first.

1. Find your limit and balance for each card. 2. Work out each percentage and the total. 3. If a card is high, a payment before your statement closes lowers the balance that may be reported. 4. Avoid going over your limit. 5. Do not close a card only to tidy up, because that removes limit. Each step is a general habit, not a promise of a score change.