Should I reduce credit limit?

twiggy86

Hi

Just looking for some advice - I have a Nxt account which I currently have approx. £200 on which will be paid off in the next few months. However the credit limit is £5k! I've never had any where near this amount on there and have no intention to!

So my question is should I reduce the credit limit? This is purely from a credit rating point of view not that I want to/will use it! What is best from a credit rating point of view - a high amount of unused credit or a more reasonable amount of unused credit?

I also have a CC with a credit limit of £7,300 of which I'm about £6,300 worth in debt but this is going down too! Again once I've started clearing this, should I reduce the credit limit? I have no intention of using this card again other than for my work expenses (max £400 per month) which I get back at the end of each month.


Any help is greatly appreciated!

natlie

I think available credit does impact on your credit score, I educed mine from £5000 to £300 a few years ago and have recently noticed it has gone back up to £5000 even though I asked then not to increase it unless I asked


Nat

lee111s

I've read that in some circumstances, asking for the limit to be reduced can be seen as a worrying sign in the sense that you cannot trust yourself to not spend to the limit given. Silly I know and I don't agree with it, but something to maybe be wary of if you're going to be looking to remortgage or anything like that in the neat future.

asparagus1968

It may depend on if you want more credit?
eg. if you apply for a loan or mortgage or credit card they take multiples of you income, and take the amount of "available"credit into consideration, and offer you lower limit.IYSWIM ?

Tryingtomoveout

It depends on the situation. If you wish to apply for a mortgage some lenders will consider your credit card limit as potential debt...it's better to keep your limit small IMO. You only need to spend 100 per month and then pay it off in full each month for your rating to improve. Hope it helps

AleMrsT

Hm, I reduced my limit so that I could not spend any more, then I tried to apply for a 0% card to transfer it to, but I got refused, I then checked my credit report and it said 'unlikely to obtain credit due to current limits being reached'. Basically, because I'd reduced my limit, the card was then seen as 'maxed' so I wasnt able to get another card. I'm now doing a DMP as I can't afford the repayments anymore, but just wanted to share my experience in case it helps.