New Delhi, Oct. 13 -- Do you usually use more than 30% of your credit card limit every month or in most months? If so, it can harm your credit score. If you are wondering how, it is due to the higher credit utilisation ratio (CUR).

In this article, we will understand what the credit utilisation ratio is, how a higher ratio can negatively impact your credit score, how to increase your credit limit, and how to lower the ratio to improve your credit score.

The credit utilisation ratio refers to the percentage of the credit limit used out of the total credit limit available. For example, suppose you have a credit card with a credit limit of Rs. 1 lakh. Suppose you spend Rs. 40,000 on your credit card in a monthly billing cycle. In this case...