Credit Debt Ratio Calculator

Formula

To calculate the Credit Debt Ratio ( $R$ ):

$R = \left( \frac{D}{C} \right) \times 100$

Where:

$R$ is the Credit Debt Ratio (%)
$D$ is the Total Credit Card Debt ($)
$C$ is the Total Available Credit ($)

What is a Credit Debt Ratio?

The credit debt ratio, also known as the credit utilization ratio, is a measure of the amount of credit card debt you have relative to your total available credit. It is expressed as a percentage and is an important factor in determining your credit score. A lower credit debt ratio indicates that you are using a smaller portion of your available credit, which is generally viewed favorably by lenders. Conversely, a higher credit debt ratio suggests that you are using a larger portion of your available credit, which can be a red flag for potential lenders.

Example Calculation 1

Let's assume the following values:

Total Credit Card Debt ( $D$ ) = $5,000
Total Available Credit ( $C$ ) = $20,000

Using the formula:

$R = \left( \frac{5,000}{20,000} \right) \times 100 = 25$

The Credit Debt Ratio is 25%.

Example Calculation 2

Let's assume the following values:

Total Credit Card Debt ( $D$ ) = $3,000
Total Available Credit ( $C$ ) = $15,000

Using the formula:

$R = \left( \frac{3,000}{15,000} \right) \times 100 = 20$

The Credit Debt Ratio is 20%.