Voluntarily reducing credit limit on a credit card

StaceyHolt · 16 January 2018 at 10:44AM

Will reducing my £3,000 balance on a credit card voluntarily impact my credit rating?

I have the credit card to boost my credit rating due to a DRO after a separation in 2013 which seriously affected my rating. It is now coming back up but that amount of money on the card is quite scary especially with the huge interest rate, as I intended to use the card for emergencies only or petrol then pay it back in full the following month but sometimes that doesn't go to plan. If I reduce the limit from £3,000 to £1,000 will that affect my credit score?

[Deleted User] · 16 January 2018 at 10:49AM

You don't have a credit score, but you do have a credit file and history.

Your file doesn't show who reduced the limit or why. Some lenders may take it as a sign that the lender reduced it. Others may think it's too low. Or some may be more likely to lend to you as you have less available credit.

It's just one factor in the wider picture.

Generally speaking though, as your limit is already quite low, I would leave it.

However, if you have problems controlling your spending, then reducing it may be the best thing for you. Better to be see as high risk by lenders than have a default and a CCJ.

PeacefulWaters · 16 January 2018 at 10:50AM

Any impact on how other lenders view you will be minimal.

And possibly beneficial.

Voluntarily reducing credit limit on a credit card

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