Automatic Credit Limit Increase

Tom_Scott

Hello all

I hope I am posting this in the right forum (never a good start to a thread!). i.e. in Credit Cards rather than Credit Score.

Barclaycard have increased my credit limit automatically along with upgrading me from gold to platinum

My question is, will this affect my credit score and to what effect?

The reason for asking is that I have a mortgage offer which will run out a couple of weeks before I complete. I will need to get an extension on the mortgage offer and do not want anything to cause an issue

I do not use my credit card and do not plan to do so. I pay approximately double the minimum payment but have only been doing this for a few months, previously only paying the minimum. Previously I was close to the limit, not having used the card for a year or so but only paying the minimum, therefor not reducing the debt by much.

Thanks in advance for any nuggets of wisdom

T

[Deleted User]

The short answer is 'it depends'. You need to balance the various ratios of credit limits to income and debts to credit limits - this applies across all credit lines you may have.

A bit more info may help us have a stab at a better answer.

InsideInsurance

Gold to Platinum wont, it doesnt show what product you hold - Barclaycard have stopped the Gold card and so everyone with one have been changed to Platinum.

An increase in limit can have a positive and negative effect depending on other factors will dictate which is the bigger impact. Some considerations:

Utilization rate (outstanding/ total available), decreases as higher limits so improves your score

Highest limit - generally higher limits are seen favourably as it shows your trusted more by other lenders

Affordability - this is the negative as they'll judge if you could still afford everything if you maxed out the limits and so a higher limit means its harder to afford it


If you have a large income but nearly maxed out cards then the limit rise will probably help. If you never use any of the cards/ no outstanding balances but are already at 100% of income to available credit then it may cause problems.


Depending on how big the increase is then you are most likely ok but you may want to ask them to reduce the limit to avoid any changes at all

CherlokHomes

What limit was you on and what is your limit now

Tom_Scott

Hi Guys

Thanks for your answers.

We are not talking large amounts here. My initial limit was £1,800. Now I think it is £3,500. I should know off the top of my head...

Other details are, I earn £24k p.a. and have circa £3,000 remaining on a loan, 1 ½ years in to the 5 year term. Other than that I have no credit cards/loans etc. Just overdraft, phone contract, life insurance etc

[Deleted User]

I'd take the increase in that case.

Tom_Scott

So leave it be rather than request the lower limit?

I thought that a lower debt to credit available ratio could increase my credit score. Though I do not want it to show I requested more credit. As I did not.

StuC75

Yes, because with the higher limit, and previous spend levels you would show a lower % of credit being used (Utilisation)..

E.g. regularly spending £1,600 with and £1,800 limits is perceived to be worse (88% Utilisation) than with a £3,500 limit (45% Utilised)..

Credit files and the approx. 'scoring' is affected by this utilised %..

Tom_Scott

Thanks guys. Hopefully I get the mortgage offer extension with no issues.

And I will continue to not use my card and to make more than the minimum payment. My plan is to see it off in 2 years.