Low Credit Card limit = bad for credit score?

toboy

I have just been looking on my experian report and it states that my credit limit is a negative marker on my file.

However in the positive section it also states that my low utilisation is a positive factor.

Would these cancel one another out? Is the first even valid with 24+ months of flawless use?

It's all very daunting and in applying for a mortgage as a first time buyer I am wondering if it would be better to cancel the account if the limit is really having a negative impact.

Thanks

[Deleted User]

Stay away from your credit limit and you shouldn't have any problems.

AJG384521

Closing it would be worse because you wouldn't have any available credit or you would be using more of your availble credit.

The_Boss

Also you don't have a credit score, so ignore that. I love the fact that the positive and negative seems to contradict each other - sums Experian up!

AJG384521

Not really a contradiction is it? Having a low credit limit is negative. Not using a lot of available credit is positive.

toboy

Thanks guys. I figured as much its just jarring signing in with that big exclamation mark!

The part about not having a credit score is pretty interesting and it actually makes sense thinking about it. I guess they want to trick you into believing that they hold all the answers over what you can and can't have.

AdrenalineJunkie22

Having £20,000 credit limit may be classed as 'negative' as its a large amount of available credit

The good side which it mentions is you're only using a small % of that available credit.

Rule of thumb is don't fill your card over 50%

toboy

Well it only ever gets used for online purchases generally <£50. I have always managed the card well on experian it's showing 72+ months of on time payments always paying the full balance.

The_Boss

AJG384521 wrote: »

Not really a contradiction is it? Having a low credit limit is negative. Not using a lot of available credit is positive.

Just re-read it and you're right - must have misread earlier.

Oops!

The_Boss

toboy wrote: »

The part about not having a credit score is pretty interesting and it actually makes sense thinking about it. I guess they want to trick you into believing that they hold all the answers over what you can and can't have.

Exactly! And lenders use their own scoring matrices and also use key data from your application form (such as salary and time with employer - both key drivers) that the CRAs do not have access to.

adindas

toboy wrote: »

I have just been looking on my experian report and it states that my credit limit is a negative marker on my file.

This is bs someone with very good credit history, a dozen credit cards with different credit limit, high income might have a very low credit limit on one particular credit ask because they particularly asking for a low limit.

Do not just believe what experience is telling. It is not their opinion count but bank.lender opinion is matter.

toboy wrote: »

Would these cancel one another out? Is the first even valid with 24+ months of flawless use

Thanks

It depends on who will be accessing your application, unfortunately there are various type of people working in the lender side. Some are smarter and more experience than other. Some are dumbs ....

If you are dealing with smart and experience underwriter they will be able to make a logical conclusion for instance by looking into further details for instance your incomes, available credit and utilisation. I could easily get mortgage, AIP, with very competitive interest by having Satander zero card with limit of £500.