Financial Wellbeing

The Number on Your Credit Card Statement That Can Turbo-charge Your Credit Score

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The Number on Your Credit Card Statement That Can Turbo-charge Your Credit Score

Spoiler: It’s not your balance or your limit—it’s how much of that limit you’re using right now. In credit-bureau speak, that ratio is called credit-card utilisation, and, yes, it absolutely feeds into the credit-score models used by Centrix, Equifax and illion here in NZ.

1. Credit-card utilisation—decoded in 30 seconds

	Example
Your limit	$5,000
Today’s balance	$1,250
Utilisation	$1,250 ÷ $5,000 = 25 %

Rule of thumb: Keep it below 30 % (ideally 10 – 15 %) on each card and across all your cards combined. Anything north of 50 % starts to drag scores down.

2. Why scores—and lenders—care so much

Signals self-control. Maxing out a card suggests you’re leaning on credit to plug day-to-day cash-flow gaps.
Predicts tomorrow’s risk. International and local studies show borrowers who regularly sit at 80-90 % of their limits are more likely to miss a payment within 12 months.
Baked into pricing. Many NZ lenders feed utilisation straight into their risk-based pricing engines, meaning high ratios can bump your interest rate before you even hit “Apply”.

3. How much could high utilisation really cost me?

Take two Kiwis, both earning $70k and applying for a $10k, three-year personal loan:

	KIWI A	KIWI B
Credit-card utilisation	18%	82%
Centrix score band	Good	Fair
Example interest rate	13% p.a.	17% p.a.
Weekly repayment	$82	$87
Total interest	≈ $2,194	≈ $2,922

That extra $728 in interest is money you could keep by trimming your utilisation before you apply for a new loan. (Figures indicative—see footnote.)

4. Five fast hacks to drop your ratio this month

1. Pay down early—before statement day. The balance that hits your credit file is the balance on the statement, not the due date.

2. Split big buys over two cards (keeping both under 30 %).

3. Set up mini top-ups. A mid-cycle $50–$100 payment keeps the running balance lighter.

4. Keep zero-fee cards open once paid off. Closing a card cuts your total limit and can spike utilisation overnight.

5. Ask for a modest limit bump—then leave it alone. A bigger denominator plus the same spending = lower ratio (only if you trust yourself not to splurge).

5. Myth-bust quickfire

Myth	Reality
“I pay in full each month, so utilisation doesn’t matter.”	If the balance is high on statement day, bureaus still see it. Pay earlier or twice a month.
“Utilisation is a US thing—NZ scores don’t use it.”	Comprehensive Credit Reporting in NZ captures limits and repayment history; lenders overlay recent balances, so high utilisation still hurts.(equifax.co.nz)
“Zero balance = perfect score.”	Scores like to see some responsible usage. A small, regularly cleared balance is healthier than no activity at all.

6. Next steps

1. Check your current ratio: Open your banking app, do the two-line calc above.

2. Grab your free credit score (Check out Centrix here).

Got questions?

Hit reply and fire away—your future self (and your wallet) will thank you.

Footnote & sources

• Utilisation impact: Canstar NZ “Avoiding credit score ‘black marks’” (Feb 2020 canstar.co.nz)

• Rate bands and repayment example only; standard amortisation on $10,000 over 36 months including establishment fees.

• CCR data items: Equifax NZ Comprehensive Credit Reporting overview.(equifax.co.nz)

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.