Credit card - Lowering credit limited

mrchagle

Hi All

Although I don't have any issues with my credit file, I am thinking about lowering my credit limited on a couple of my credit cards,

e.g. One has a limited of £5000 which I will never use/or need. I have the option to lower it online and was thinking of lowering it to say £500 .

Does something like this, does it look 'better' on your credit file?

Regards
G.

tinkerbell28

No I don't think it does.

I know people go on and on about available debt vs income ratio. But for many people with good histories, in well paid jobs. It doesn't seem to be an issue. It always seems to be a problem for "consolidators" who seem to have loads of credit lines in use.

However to me, I'd say that it is only potentially a real problem if maybe you are desperate for a certain product. If a mortgage lender isn't sure, they can tell you to close some accounts.

A £5000 limit which shows a little bit of use here and there. Shows you aren't financially desperate and maxed out. It also shows other lenders trust you.

Start slashing the limits to £500. The kind of limits sub primers and low earners get. Other creditors may start wondering why your limits are so low. Plus one purchase could nearly max out your revolving credit usage.

The_Boss

^ what Tink said.

mrchagle

Thanks tnkerbell28 -- That's been most helpful. I shall leave well along.

Fortunately, I won't need to reapply for a mortgage I"ve just recently paid it off :-)

Cycrow

it also depend on how much debt you have compared to your limits.

reducing a limit will increase your utilisation, which can look bad

having £300 on the card wont look bad at all when the limit is £5000, but if the limit was £500, it would look pretty bad

Mr_F_Dorsetty

The big picture and bottom line is that:

* Some companies exist to lend money
* That money invariably isn't their money
* They want customers who borrow big and pay back without a hitch

There's an awful lot of suburban myths about credit and the gaining of credit. They are myths because they make swingeing statements; but every CC and loan company have different criteria, so there is no 'generally'.

If I were a lender (and I have been in the past) then my first question would be "Why has this guy lowered his limit? Makes no sense unless he doesn't trust himself maybe...."

It's a question your original post does not satisfactorily explain imo.

Personally I'd leave it alone and concern yourself with something more important in life. It's tinkering and tinkerers often end up breaking things that they cannot fix.

Thrugelmir

How many cards do you hold in total?

Do you need them all?

mrchagle

I have 6 CCs -

But I only use

- Barclaycard Cashback... for cash back. (
- Santander 123 Cashback... for Petrol (cashback)
- Halifax Clarity ... for the £5 for spending £300 p/m

Above get paid off each month by direct debit, only spend a few hundred

I obvious have a few that I do nothing with... but have them 'just in case'

Thrugelmir

mrchagle wrote: »

I obvious have a few that I do nothing with... but have them 'just in case'

The obvious question and therefore concern is always going to be why?

In the future highly probable that the amount of credit facility granted will become a topic for review.

tinkerbell28

Thrugelmir wrote: »

The obvious question and therefore concern is always going to be why?

In the future highly probable that the amount of credit facility granted will become a topic for review.

I can't agree with that, it's a bit mystic meg. He's on about the here and now.

His credit cards won't be harming him.

mrchagle

All I was after was would lowering my available credit on my cards affect my credit score in a positive way. I'm lucky to have no cards maxed out, I pay them off each month, although I have around 6, of which three are only used for day-to-day spending and earning "cash back" and rewards.

I think I use the credit card company's more than they use me!! Like a lot of MSE people here....

I think my question has already been answered by tinkerbell28.