<prompt> Human: This is stupid.. Isnt this the point of a credit card? If so, whys it matter if the balance increased from 0 to 131 he just paid it off and bought only one item. His limit is 500 so why does this qualify to take it down 16 points? Really doesnt make sense.  <response>: First, 16 points is in the noise. I wouldnt call that a drop at all.Second, credit utilization is an important factor because using all of your available credit is a sign of financial distress. The lower the percentage of credit used to credit available, the more you show you are capable of prudently managing credit, are not in any sort of financial distress, and thus are a good bet to get even more credit in the future. 