Voluntarily reducing limit on Credit card - will it affect score?

onewhoasks

Hi.

I have reduced the available credit limit on two credit to a combined total of £3.5k - there is only £200 currently utilised on one of the cards which is about to be taken by direct debit - I doubt I will use much more than that in future except for an emergency - hence reducing it. I didn't ask for the increases in the first place!.

Thought I was doing a good thing when i did this yesterday, but have since read that reducing limits can damage credit history - any advice please?

CherlokHomes

onewhoasks wrote: »

Hi.

I have reduced the available credit limit on two credit to a combined total of £3.5k - there is only £200 currently utilised on one of the cards which is about to be taken by direct debit - I doubt I will use much more than that in future except for an emergency - hence reducing it. I didn't ask for the increases in the first place!.

Thought I was doing a good thing when i did this yesterday, but have since read that reducing limits can damage credit history - any advice please?

Not sure why anyone would reduce their credit limits.

Many of us on here have more then our salary in credit limits and it doesn't effect me nor anyone else that I've heard of either.

[Deleted User]

If you're only using £200 out of £3,500, then it's unlikely to do much harm.

The_Boss

It won't affect your credit score because credit scores do not exist.

Although it may affect how lenders score future credit applications that you make

onewhoasks

CherlokHomes wrote: »

Not sure why anyone would reduce their credit limits.

Many of us on here have more then our salary in credit limits and it doesn't effect me nor anyone else that I've heard of either.

Thanks for your feedback. There was a three fold reason really.

1. to reduce exposure if we were to suffer unauthorised use on the card.

2. If we wanted to borrow large amounts we wouldn't do it through a credit card - therefore we didn't need the high limits on our cards.

3. Related to the above point, I understood that having too much "available credit" could also be a negative point from a lenders perspective.

ricky_v

Yes I have, luma gave a limit of £1,500 however I wanted it reduced to £300 as the maximum you can spend on the card to get the cashback per month is £225, and even then my monthly spend on the card is nowhere near that as I rarely use the motorbike so petrol spend is small and most of my food has a yellow sticker on it. There is simply no need to have a £1,500 limit on it!

I've also got rid of the overdraft facility (£500) on a defunct current account. I do all this as I want to have the highest limit possible on a future 0% card to stooz off as I believe CC companies look at the amount of access to unsecured credit in relation to your income, and will adjust their limit accordingly.

Oh yeah, as The Boss said, ignore your "score", the CRA's are not lending you the money

boo_star

ricky_v wrote: »

Yes I have, luma gave a limit of £1,500 however I wanted it reduced to £300 as the maximum you can spend on the card to get the cashback per month is £225, and even then my monthly spend on the card is nowhere near that as I rarely use the motorbike so petrol spend is small and most of my food has a yellow sticker on it. There is simply no need to have a £1,500 limit on it!

I've also got rid of the overdraft facility (£500) on a defunct current account. I do all this as I want to have the highest limit possible on a future 0% card to stooz off as I believe CC companies look at the amount of access to unsecured credit in relation to your income, and will adjust their limit accordingly.

Oh yeah, as The Boss said, ignore your "score", the CRA's are not lending you the money

Having worked in a discretion based lending role for a bank in the past, potential debt is a fairly big factor in lending.

If your limits mean that you could just max out your cards in a heartbeat, we exercised extreme caution and essentially used limits as debt.

However..

Reducing limits may be misconstrued, the report won't state if it was voluntary or forced and most lenders will assume forced.

Damned if you do etc.