Credit utilization is the percentage of your available revolving credit that you're currently using. It sits inside the "amounts owed" category that FICO says determines 30% of a FICO Score.
Where you'll see it
Rarely by name on a statement. You calculate it: the balances on your revolving accounts divided by the total credit limits on those accounts. Closing a card removes its limit from the denominator, which is why the number can move even when your spending doesn't.
The rule behind it
Amounts owed on accounts determines 30% of a FICO® Score
Don't close unused credit cards as a short-term strategy to raise your scores. Closing credit lines may hurt your score by reducing your overall available credit and increasing your credit utilization ratio.
It's recommended to keep your credit utilization (the percentage of your available credit that you're using) below 30% of your credit limit, and ideally below 10%.
FICO is explicit about the limits of any single-factor claim, including this one:
"Because of this, it's not possible to measure the exact impact of a single factor in how your FICO Score is calculated without looking at your entire report."
Consumer info, not financial advice.