NexaClick – Personal Finance for Beginners

Credit Utilization Ratio Explained (30% Rule)

 

Credit utilization ratio explained with 30 percent rule and its impact on CIBIL score
Credit Utilization Ratio Explained (30% Rule)

Introduction

Bahut se log ye samajhte hain ki time par EMI aur credit card bill pay karna hi kaafi hai achha CIBIL score banane ke liye. Lekin reality ye hai ki ek aur factor hota hai jo silently aapke credit score ko big damage kar sakta hai — Credit Utilization Ratio.

Kai log time par payment karte hain, fir bhi:

  • CIBIL score low rehta hai

  • Credit card limit increase nahi hoti

  • Loan approval me problem aati hai

Is article me hum detail me samjhenge:

  • Credit Utilization Ratio kya hota hai

  • 30% rule kya hai aur kyun important hai

  • High utilization CIBIL score ko kaise affect karta hai

  • Credit utilization kaise control karein

Agar aap credit cards ya loans use karte ho, toh ye guide aapke liye must-read hai.

What Is Credit Utilization Ratio?

Credit utilization ratio ka matlab hota hai:

Aap apni available credit limit ka kitna percent use kar rahe ho

Ye factor mainly credit cards par apply hota hai.

Simple Formula:

Credit Utilization = (Used Credit / Total Credit Limit) × 100

Example:

  • Credit card limit: ₹1,00,000

  • Used amount: ₹60,000

👉 Credit utilization = 60% ❌ (High)

Credit Utilization Ratio CIBIL Score Me Kyun Important Hai?

Credit utilization CIBIL score ka second most important factor hota hai.

📌 Payment history ke baad, credit utilization ka sabse zyada impact hota hai.
(Agar aap detail samajhna chahte ho toh 👉 How CIBIL Score Is Calculated wali post dekhiye)

High utilization bank ko ye signal deta hai ki:

  • Aap credit par zyada dependent ho

  • Aap financial pressure me ho sakte ho

Isliye banks isse risk factor maante hain.

What Is the 30% Credit Utilization Rule?

30% rule ka matlab hota hai:

Aap apni total credit limit ka 30% se zyada use na karein

Example:

  • Credit limit: ₹1,00,000

  • Safe usage: ₹30,000 tak ✅

30% ke neeche rehne par:

  • Credit score healthy rehta hai

  • Banks aapko disciplined borrower maante hain

Credit Utilization Levels & Their Impact

✔ Below 30% (Ideal Zone)

  • Best for CIBIL score

  • Loan approval chances high

  • Credit limit increase offers milte hain

⚠ 30% – 50% (Warning Zone)

  • Score par thoda negative effect

  • Occasional ho toh manageable

❌ 50% – 75% (Risk Zone)

  • Score noticeable drop karta hai

  • Banks cautious ho jaate hain

🚫 Above 75% (Danger Zone)

  • Heavy negative impact

  • Loan rejection ke chances badhte hain

  • CIBIL score rapidly gir sakta hai

Credit Card vs Loan: Credit Utilization Difference

Credit Cards:

  • Utilization bahut important

  • High usage = double negative impact

  • Payment history + utilization dono affect hote hain

Loans (EMI):

  • Utilization concept direct apply nahi hota

  • Lekin over-borrowing negative signal deta hai

👉 Isliye credit utilization ka main focus credit cards par hota hai.

Minimum Due Pay Karne Par Credit Utilization Kya Hota Hai?

Bahut log sochte hain:

“Minimum due pay kar diya toh sab safe hai”

❌ Reality:

  • Late payment mark nahi lagta

  • Lekin outstanding amount high rehta hai

  • Credit utilization ratio high hi rehta hai

👉 Best practice:

Full outstanding amount pay karein

Multiple Credit Cards Me Credit Utilization Kaise Calculate Hota Hai?

Credit utilization combined basis par calculate hota hai.

Example:

  • Card 1 limit: ₹50,000 (used ₹20,000)

  • Card 2 limit: ₹50,000 (used ₹10,000)

Total limit = ₹1,00,000
Total usage = ₹30,000

👉 Credit utilization = 30% ✅ (Safe)

How to Reduce Credit Utilization Ratio

✔ 1. Credit Card Spend Kam Karein

Non-essential expenses avoid karein.

✔ 2. Credit Limit Increase Request Karein

Limit badhne se utilization automatically kam hota hai
(bas spend increase mat karna)

✔ 3. Multiple Cards Ka Balanced Use Karein

Ek hi card ko max out mat karein.

✔ 4. Bill Generation Date Samjhein

Statement generate hone se pehle high amount clear kar dein.

✔ 5. Old Cards Close Mat Karein

Old cards credit age + total limit dono ke liye beneficial hote hain.

Credit Utilization High Ho Aur Score Gir Gaya Ho Toh?

Agar aapka score already low hai:

  • Utilization kam rakhein

  • 2–3 months tak perfect behaviour follow karein

Generally:

  • 30–90 days me improvement dikhne lagta hai

Agar score issue late payment se related ho, toh 👉
How Late Payments Affect Your CIBIL Score wali post bhi zaroor padhiye.

Common Myths About Credit Utilization

❌ Credit limit badhne se spending badhani chahiye
❌ 100% limit use karna normal hai
❌ EMI users ko utilization matter nahi karta

✅ Sach:

  • Limit sirf buffer hoti hai

  • High utilization risky hota hai

  • Credit cards me utilization sabse zyada matter karta hai

Conclusion

Credit utilization ratio chhoti si cheez lagti hai, lekin CIBIL score ka silent killer hoti hai.
Agar aap:

  • 30% rule follow karte ho

  • Credit cards responsibly use karte ho

  • Regularly credit report check karte ho

toh aap strong credit profile easily maintain kar sakte ho.

👉 Golden rule: Credit limit zyada ho, usage kam ho.