Does credit limit affect credit score?

modelreject

Hi,

A quick question. Does credit limit affect credit score?

The reason I am asking is because I was recommended by credit expert to reduce my credit limit. This apparently will increase my score, the reason being that I don't use the credit on my credit card. Maybe the people providing the loan sees that I have a load of credit and I don't need the loan amount as I haven't used my card often enough?

Weird reasoning, but I like to hear your thoughts on this one as I don't see it mentioned on Martin's Credit Score information page.

Thanks,
C

Wutang_2

modelreject wrote: »

Hi,

A quick question. Does credit limit affect credit score?

The reason I am asking is because I was recommended by credit expert to reduce my credit limit. This apparently will increase my score, the reason being that I don't use the credit on my credit card. Maybe the people providing the loan sees that I have a load of credit and I don't need the loan amount as I haven't used my card often enough?

Weird reasoning, but I like to hear your thoughts on this one as I don't see it mentioned on Martin's Credit Score information page.

Thanks,
C

I think you may have been told before that the 'credit score' is irrelevant...

and no, they will base it on how much you owe.

TrickyDicky

Wutang wrote: »

and no, they will base it on how much you owe.

To true. Although the amount you owe is more relevant, high credit limits can be a reasonable factor. You could go out tomorrow and max out your credit cards, and if that was the case the new debt would be unnafordable. This is always taken into account by new lenders.