Credit utilization, the percentage of your available credit you are currently using, is one of the most influential factors in most credit scoring models, second only to payment history.
A commonly cited guideline is to stay under 30 percent utilization on each card and overall, though lower is generally better for your score. Someone with a 1,000 dollar limit carrying a 800 dollar balance is using 80 percent, which can noticeably suppress their score even with perfect payment history.
Utilization is recalculated every billing cycle, so it can improve quickly once balances come down. Paying down balances before the statement closing date, not just the due date, can help since that is often when the balance gets reported. This is educational information only.