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Credit utilization is the percentage of a borrower’s available credit currently being used, calculated by dividing total balances by total credit limits across revolving accounts such as credit cards and lines of credit; it is one of the factors reflected in a borrower’s credit score.
Utilization is tracked both per account and in aggregate across every revolving trade line on a borrower’s credit report, so a single maxed-out card can affect the picture even if other accounts carry low balances.
Because utilization reflects a snapshot in time, it is one of the more changeable inputs behind a credit score — paying down revolving balances before applying can shift the figure a lender or scoring model sees, unlike payment history, which reflects a longer track record.
Credit utilization = ( Total balances ÷ Total credit limits ) × 100
Calculated per account and overall: both bureaus report utilization at the individual trade line level and in aggregate across all revolving credit.
One input among several: utilization is one factor reflected in the credit score, alongside payment history and the age and mix of accounts.
Reported by both bureaus: Equifax Canada and TransUnion Canada each track utilization from the trade lines on file.
Can be improved before applying: since utilization reflects a snapshot in time, paying down revolving balances ahead of a mortgage application can change the figure a lender sees.
A borrower carries balances on two credit cards heading into a mortgage application:
$2,750 + $450 = $3,200 total balances; $5,000 + $3,000 = $8,000 total limits; $3,200 ÷ $8,000 = 40%.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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