Suppose you have two credit cards. the first has a balance of $410 and a credit limit of $1,000. the second has a balance of $510 and a credit limit of $1,000. what is your overall credit utilization?

Credit utilization is the amount of credit owed compared to the total credit limit. Since there are two cards, we have to add the credit balances of both cards, then divide that by the total credit limit of both cards.

TOTAL CREDIT BALANCES:
=$410 + $510
=$920 total credit balance

TOTAL CREDIT LIMIT:
=$1000 + $1000
=$2000 total credit limit

CREDIT UTILIZATION:
=total balance ÷ total limit
=$920 ÷ $2000
=0.46 credit utilization

PERCENT:
to find percent multiply decimal by 100 (or move decimal two places to the right)
=0.46 x 100
=46% credit utilization

ANSWER: The overall credit utilization is 46% (which is quite high- the higher the utilization, the higher the credit risk to credit lenders).

Hope this helps! :)

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