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11 Responses to “How do you lower your credit limit without lowering your overall credit score?”
By missoctober003 on Jun 7, 2008 | Reply
I say keep the cards open because with a low balance on the card and a high limit it definitely makes your credit look better. Don’t worry about having that much credit in your name unless you plan on purchasing a loan from a bank. You aren’t using the card anyway, right?
By VB.NET Guru on Jun 10, 2008 | Reply
Call the bank, and tell them to lower your credit limit. It is that easy!
By Matt K on Jun 13, 2008 | Reply
Yes - by lowering your limits, this indicates to another lender that you may be in financial hardship. The credit score formulas have this programmed into them.
My advice is to just let them keep raising your limit. As long as you are financial responsbile, which is sounds like you are, then it won’t hurt you. Just don’t use any more credit than you can afford to repay - which sounds like what you already have been doing.
By SPIFIMAN1 on Jun 17, 2008 | Reply
Your talking about your debt to credit ratio which makes up 30% of your overall score.
If your balance is really low and your new credit limit reflects no more then 30% usage, your score will not be affected.
If however your new limit makes your debt to credit ratio over 30% your score will take a hit.
There is nothing wrong with having a high limit as a matter of fact it’s good since it makes it hard to exceed 30%.
It’s not the credit you have that matters it’s how you manage it that counts.
By Bill M on Jun 19, 2008 | Reply
You have a high credit score because you have the self-control not to charge your credit card up to the limit. Some day you might have an emergency where you may need that line of credit.
By newjerseyguy on Jun 19, 2008 | Reply
They will lower the limit if you ask them to. But why bother as long as you have a zero balance?
By myacumen.com on Jun 20, 2008 | Reply
I think it would be best to keep your credit limit the same. Unfortunately the credit score system (FICO) can be complicated to understand.
By Bruce T on Jun 23, 2008 | Reply
Over the years in the mortgage industry I coached many to improve their credit to purchase a home. In some cases over a year if the client did within their means as I instructed. The credit bureaus use a computer system to calculate credit scores and no one can or will tell you their scoring system or method.
In a five year period I chartered various clients in improving their score, pulling their credit evey two months after following my instructions on paying a bill, disputing an item(s), etc. I developed a pattern chart on what makes scores go up or down.
In your case, do not request a lower limit as you were told. What really effects credit scoring with credit is the percentage owed in relation to your High Credit Limit indicated on the credit report. No matter if your High Credit Limit is $100 or $20,000 if you are within 95% owing your score will drop 22 to 30 points, 90% 18 to 20 points, 80% 8 to 15 points.
Just a note for your friends and family: I saw this a lot when doing mortgages and prevented people from getting the loan. Not your case but you can advise if you know of someone, Student Loans after graduating allow a deferred time to begin paying, usually 3 to 5 years. This is to allow time for someone to start making money and live a normal life. During this period interest accrues putting your amount owed substantially over your High Credit Limit. A really big hit to credit scoring, as much as 40 to 50 points per loan depending on the percentage over. Think about it, you graduated, got a job making really good money, feeling good about life, you can conquer anything and you can now budget to buy a home. That great Student Loan you have not been making payments for years will come back to haunt because you are being told the big NO in purchasing a home, not good for a young, upcoming person. Start making those payments as soon as you can regardless of time you are allowed.
By XoxoxoxoX on Jun 24, 2008 | Reply
Do NOT lower your limit, that will negatively effects your credit score. There is a debit ratio that credit reporting agencies take into consideration. It is like telling people NOT to close their credit card, because you want HIGH available credit limit to you.
By Tigh on Jun 27, 2008 | Reply
you do not want to lower your limit.
Think of it as a asset the less assets you have the less likely you are to pay your debt in case of a emergency.
It will not cost you anything to keep it if you don’t use it.
By Steve R on Jun 28, 2008 | Reply
You are not supposed to use all the credit on the credit card. You can use up to 30% of the credit card limit, which will make you an excellent credit risk. If they increase your limit, it’s okay.