Calculation of CC Utilization and CIBIL Report

POSTED BY Mayank ON August 6, 2013 8:53 pm COMMENTS (4)

I have few questions.

How exactly is the credit card utilization calculated?

Suppose, the monthly cycle is 15-July to 15 Aug, last payment comes out to be around 2 Sept. Now if I have a debt of Rs.5000/-  in this cycle out of the limit of Rs.30,000/- ( which is paid on the last date) and for the next cycle (15 Aug to 15 Sept)  I spent Rs.3000/- on Aug 25. Now the utilization is calculated as 8000/30000 or 5000/30000?

Also, in the CIBIL report, is it mentioned anywhere that what kind of credit has been taken, say, swipe or cash? And what the amount previously paid? It does mention the amount has been paid on time or after how many days but does it mention that a sum of 6000 or 2000 has been paid?

4 replies on this article “Calculation of CC Utilization and CIBIL Report”

  1. Credexpert says:

    Dear Mr. Mayank,

    1. Your credit card utilisation is the ratio of your usage every month to the credit limit available on your card. The ideal percentage of your credit limit utilisation should be upto 40%.
    2. It is advisable to not use your credit card (even if it is secured) for withdrawing cash. Even if you do, ensure that you pay your bills within the interest free period (48 days as you mentioned). This is for the sole purpose that you do not pay unnecessary interest.
    3. It is difficult to say to what extent, and when your score will increase. But using a secured credit card definitely helps in the process.

    As you are keen on maintaining and improving your credit bureau score, we would request that you do maintain the balance of your credits (secured v/s unsecured accounts, regular and timely repayment on your bills, also maintain the % utilisation on your credit card bills, etc.). Consistent, regular monitoring of your credit is also important to lead a healthy credit and debt free life.


  2. Mayank says:

    thank you for the responses! Appreciate it very much.
    Ashal, I tend to agree with you. Logically, I’m using 8000 out of the total limit but I am not sure what is exactly used to calculate the utilization. If it is total debt, as you mentioned, or the outstanding dues in that month as mentioned by Credexpert. Could you both enlighten me, please?
    The purpose of the question is that I want manage my CIBIL score. Currently it is NH as I don’t have any liability. My card application was rejected twice by the bank I hold salary account with. I applied applied for a secured credit card but my swipes and bills will only account for almost 10% of my limit or probably a little less. I use cash mostly. To bring it up to 25-30%, I am planning to withdraw cash as it is a secured card and I get interest free period of 48 days for cash withdrawaIs. Though I would have to shell 300 for the same, I don’t mind that as I am not planning to thi for long period plus it should be compensated by the interest I get on the TD. Do you think it is a good idea? Does taking cash affects the credit rating negatively and could possibly lead to downgrading of the kind of assist from Standard or is it mentioned somewhere in the report and my future applications could be rejected or scrutinized further as I took out cash for certain period?
    Also, if I keep this going on for six months – (timely payment, utilization ranging between 25-30% and high credit not more than 30% of the limit), how much should I be expecting the score to be from NH with no current liability?

    Thank you. I know I have just asked too many questions.

  3. Credexpert says:

    Dear Mayank,

    Assuming the monthly cycle of 15th July – 15th August and payment due date being 2nd September, any transaction made during this cycle would be used for the calculation of credit utilization ratio.

    Hence as per the example stated above;
    • The utilization for 1st billing cycle would be calculated as:
    Outstanding balance Rs.5000/ Credit limit Rs.30000=16.67%.
    • The utilization for 2nd billing cycle would be calculated as:
    Outstanding balance Rs.3000/ Credit limit Rs.30000=10.00%.

    CIBIL report captures the cash limit allowed against the credit card but whether the card was utilized for swipe or cash withdrawal is not captured. Also the field “Actual Payment Amount” indicates the actual amount that was repaid. Depending on whether the lending institution captures this data, the CIBIL report may or may not reflect this detail.


  4. Dear Mayank, unless you are not defaulting, the routine account ‘ll not be reported for the purpose you are asking. As you have not paid the past dues on 25th Aug, on that date, your utilization is 8000/30000. After payment on 2nd sept. it ‘ll fall back to 3000/30000.



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