Credit Utilisation
What Credit Utilisation means
The percentage of your total sanctioned credit card limit currently in use; high utilisation signals financial stress and reduces your credit score.
Example
With ₹5 lakh combined credit limit and ₹2 lakh outstanding, your utilisation is 40%; paying it down to under ₹1.5 lakh (30%) typically lifts your CIBIL score within 30–60 days.
This definition is based on TransUnion CIBIL – Score Factors ↗. We link every figure to its primary source — see our data methodology.
Related eligibility terms
- CIBIL ScoreA three-digit credit score (300–900) generated by TransUnion CIBIL, India's oldest credit bureau, based on your repayment history, credit mix, and credit utilisation. Lenders use it as the primary measure of creditworthiness.
- Co-borrowerA joint applicant who shares equal legal and financial responsibility for repaying the loan and may co-own the underlying asset. Adding an earning co-borrower can raise loan eligibility.
- Credit ScoreA three-digit numerical summary (typically 300–900) of your credit history compiled by licensed credit bureaus — TransUnion CIBIL, Experian, Equifax, and CRIF High Mark — and used by lenders to assess risk.
- FOIRThe share of a borrower's gross monthly income committed to all fixed loan obligations (existing EMIs + proposed new EMI). Banks cap FOIR at 40–55% to ensure affordability.
- GuarantorA third party who agrees to repay a loan if the primary borrower defaults, without co-owning the financed asset. Their creditworthiness and income are assessed during the loan application.
- LTV RatioThe proportion of a property's assessed value that a bank will finance, expressed as a percentage. The remaining amount must come from the borrower as a down payment (margin money).