Lowering Credit Limit - Effect on credit score?

mihaib90

Hi there

I have had a credit card from a high street bank since 1997 and my credit limit has been gradually increasing and it is now at a hefty £15,000. I use this card regularly for day to day purchases (food, petrol, misc) as well as the occasional high-value purchase every few years - such as new TV for example. In all cases, the balance is paid off in full every month.

However, the credit limit that is available on this card has started to scare me, even more so due to the fact that recently my card details had been stolen and by pure luck i was able to stop the card before any serious damage happened. I was thinking of calling my card provider and ask them to lower my credit limit to something in the region of £5,000. My question are:

1) What sort of impact will this move have on my future credit rating?

2) Will any future lender see this reduction in available credit limit from 15k to 5k as a "bad thing" because they may believe that my card provider initiated this move ?

3) Could this benefit my credit rating because - as Martin states in one of his articles- having too much credit available is seen as a risk by some lenders?

Thanks.

grumbler

It depends: Reducing credit limit to lower credit rating

chanz4

Answer is, know one knows except for the banks. As per all articals including which they are on what the writters oppinion is

mihaib90

I have applied for a Halifax Credit Card and got accepted. The reason for going for the Halifax Card is due to the fact that you don't get charged a fee when making purchases abroad. I was thinking ahead to the future because I now have two CCs and whether this may be frowned upon whenever I apply for finance again. Every three years I get a new car on Personal Contract Hire finance agreement; I have not had any problems getting accepted for the past six years but i was just contemplating if things may turn for the worse now that i have two CCs.

Ravenshade

Don't reduce your credit limit. Instead ask them to send you an alert when you go over a certain amount. That way you have your own 'self-imposed' limit. This shows control.

Yes they've given you potentially 15k to spend as you see fit. However they don't actually expect you to spend that. It shows in fact how much they trust you to be sensible, give them a bit of reward and so on.

Check your experian credit report just to see what effect it has had on your score. (Don't forget to cancel ^-^)

YorkshireBoy

Ravenshade wrote: »

Check your experian credit report just to see what effect it has had on your score. (Don't forget to cancel ^-^)

Are they giving away the meaningless numbers free with the trial these days?

If they are, take it with a pinch of salt. If they aren't, don't waste your money!

wardyface

Ravenshade

I noted your comment there with interest as I came on here to ask about my bank's credit card lending dept reducing my credit limit from £15,000 to £2,100 without telling me. I thought all was in order as I'd just paid £400 before the due date on a debt of £1,090 (being Christmas spending on top of my usual) The first hint of a problem was yesterday when my card was rejected when I went for £20 worth of petrol. I wondered if someone had robbed my account as I knew I had a hefty credit limit, so checked online as soon as I got home to find my credit limit slashed from £15 k to " £2 k

I phoned them this morning to be told that my credit limit had been cut from because I didn't need the £15k. The fact that this cut had left me over my credit limit didn't seem to bother them at all. They said that a letter would be put in the post. They agreed to increase it slightly to cover the fact that their decrease had dropped me into the wotsit. I feel annoyed about this as I never saw it coming. They have plenty of my money in ISA's so I am a bit miffed at the shabby way I've been treated