Reducing Credit limit on credit cards?

laura2481

Does anyone know if reducing your credit limit on a credit card affects you credit score? Thinking of reducing my Barclaycard limit from £950 down to £700 so I can't run it up again.

Birdy12

I read somewhere on here, (was it on the credit cards thread?), that if you request a reduction on your credit card and/or overdraft, it was viewed as a new application and would show on your credit report. Correct me if I'm wrong please...

Broken_hearted

Capital one always said it did when I reduced mine years ago.

poorandindenial

I cancelled one of mine and reduced another by £4k (one which the bank had increased by £8k in the course of a year without asking me) about three months before I applied for and got a Virgin cc without any trouble but not sure whether different cards view it differently.

laura2481

Hmmm, it seems a little unfair that REDUCING the amount that you can borrow affects you negatively.

Does anyone have a definitive answer? :undecided

ineedhelp2008

I've reduced mine online twice recently and it was instant. (Nationwide CC)

halight

I did one of mine a few years back and i dont thin k it showed up on my report in a bad way

laura2481

ineedhelp2008 wrote: »

I've reduced mine online twice recently and it was instant. (Nationwide CC)

But did it affect your credit rating. That is the burning :bdaycake: (candles is the nearest illustration I could get to burning :rotfl: :rotfl: ) question?!?

poorandindenial

Not for me but that might just be Virgin. Different companies score in different ways so the 'score' or 'rating' may have no baring on the decisions of companies that you borrow from.

When are you likely to need credit again? If it isn't for 6 onths a year or more I really don't think it would be a problem with most lenders so long as the rest of our file is in order and you meet their other criteria.

Sorry but I don't think there is one answer

(nice improv with 'burning' by the way)

Gemmzie

It does affect your credit "rating" as some lenders look at how much you have available and what percentage of it you're using so sometimes lower limits can have a negative effect.
Happened to my mum when we were clearing cards last year.

poorandindenial

Good point Gemmzie - I wasn't thinking of it in that way

When I reduced mine it was to get rid of a large chunk of spare credit that was just sloshing around because banks kept on upping my limits rather than to get all my limits close to my debt so when they ran this calculation I would have still looked OK on that basis.