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ArticlesCredit utilisation ratio shows how much of your available revolving credit is currently being used. A simple calculation is outstanding revolving balance divided by total revolving credit limit, multiplied by 100. It is useful for understanding card usage, but it is not the same as Debt Burden Ratio or Etihad Credit Bureau’s Income Utilisation Ratio, and no single percentage guarantees a particular Credit Score outcome.
How to calculate credit utilisation
A simple card-level formula is: outstanding card balance ÷ credit limit × 100.
If a card has a AED 20,000 limit and AED 5,000 is outstanding, the utilisation ratio is 25%. Across multiple cards, you can also compare total revolving balances with total revolving limits to understand overall usage.
Why the number can move during the month
Credit-card balances change as purchases, repayments, refunds, instalments and fees are posted. The balance reported to a credit bureau can also reflect a particular reporting date rather than the exact amount visible in your banking app at every moment.
That means a utilisation percentage is a snapshot, not a permanent characteristic of an account.
Credit utilisation vs Income Utilisation Ratio (IUR)
These are different concepts. Credit utilisation compares revolving credit used with available revolving limits. Etihad Credit Bureau’s Income Utilisation Ratio compares scheduled monthly payments with last reported income.
Etihad Credit Bureau states that, for its IUR calculation, credit-card payments are represented as 5% of the credit limit of all active credit cards, alongside loan payments and certain telecom and utility dues. Do not substitute IUR for credit utilisation or vice versa.
Credit utilisation vs Debt Burden Ratio (DBR)
DBR is an affordability measure used in UAE lending that compares qualifying monthly debt obligations with income under the applicable framework and lender assessment. Credit utilisation focuses on how much revolving credit is being used.
A person can have a low utilisation ratio but still have significant loan instalments, or high utilisation while having few other monthly debts. The measures answer different questions.
Does credit utilisation affect your credit profile?
Credit utilisation is a useful indicator of revolving-credit usage and balances are part of the information reported on credit facilities. However, FinShark should not publish a universal rule such as “stay below 30% to guarantee a good score.” Etihad Credit Bureau does not state that one utilisation threshold guarantees a particular Credit Score or approval result.
A healthier approach is to keep borrowing manageable, pay obligations on time and review your broader Credit Report rather than optimising around an unsupported single-number rule.
How to lower utilisation
- Repay part of an outstanding revolving balance.
- Avoid using additional revolving credit when you do not need it.
- Review whether instalment conversions or pending transactions are keeping part of the limit occupied.
- Do not request additional credit solely to manipulate a ratio; any new or higher facility should still make sense for your needs and affordability.
Frequently asked questions
What is a good credit utilisation ratio in the UAE?
There is no single FinShark-recommended percentage that guarantees a good Credit Score or approval. Lower use of available revolving credit generally means less of the facility is occupied, but lenders assess the broader credit profile.
Is credit utilisation the same as Income Utilisation Ratio?
No. Etihad Credit Bureau’s IUR compares scheduled monthly payments with last reported income. Credit utilisation compares revolving balances with revolving limits.
Is credit utilisation the same as DBR?
No. DBR is a debt-affordability measure based on qualifying monthly obligations and income. Credit utilisation is about the use of revolving credit limits.
Can paying my card reduce utilisation?
Yes. Once a repayment is posted and reduces the relevant outstanding balance, the utilisation calculation can fall, assuming the credit limit is unchanged.
Does 0% utilisation guarantee loan approval?
No. Banks consider multiple factors, including income, existing liabilities, credit history, product eligibility and their own underwriting rules.