Explore commonly used personal finance terms.
Available credit refers to the difference between an individual’s credit limit and their current balance. It shows how much credit remains before reaching the limit, which can affect credit scores if it falls too low. For example, using too much of one’s credit limit can lower the credit utilization ratio, negatively impacting credit scores. Maintaining a healthy amount of available credit by regularly paying off balances can improve credit health and prevent excessive debt accumulation.
