Percentage of available credit used - confusion regarding the criteria

seafarer3000

I wonder if anyone can clarify or confirm. I've read that a) an individual's credit rating depends on both the percentage of the total available credit used i.e. all lines of credit added from all lenders, and b) also the percentage of usage of an individual line of credit, i.e. a single credit card. In my case, my overall total usage on credit cards is below 20%, but on some individual cards is over 80%. In this second instance this is because the banks have encouraged me to take out balance transfer offers up to these amounts. It seems odd that my credit-worthiness should then be penalised for doing so. I would be grateful for any observations or clarification, i.e. is one or both of these true?
Many thanks.

[Deleted User]

Lenders will look at both, but the overall picture is more important. The balance of each will vary across lenders.

You're not penalised for BTs. If anything, you're rewarded, as the debt remains the same but the promo rate is visible to lenders.

seafarer3000

Thanks. I'm just puzzled then why, in under a year, I've gone from being bombarded with balance and money transfer offers to having none available, and all new credit cards showing as 0% likely to be offered to me. I've never missed a payment in 6 years, and have absolutely nothing problematic in my credit history. I do however have a lot of cards. Approx 85000 of available credit of which approx 15000 is utilised.

[Deleted User]

There's a bit of an economic blip going on at the moment  Lending has tightened significantly.

Carry 15k of debt is going to make it tough to get further deals.

D3xt3r5L4b

£15k of debt during a pandemic-led recession maybe?

Thrugelmir

There's a progressive tightening down on what is regarded as persistent debt. Lenders are frowned upon for practices in the past. Covid has merely added another dimension. 

Grumpy_chap

D3xt3r5L4b said:

£15k of debt during a pandemic-led recession maybe?

Especially with a further £70k still available.

seafarer3000

So perhaps I have too much available credit? I naively imagined that to be a good thing and a sign of lenders' confidence. Thanks everyone for your comments. It's a tricky one isn't it? I can reduce the 15K, and also eliminate some cards. I can do that and keep my overall debt to under 30% of total credit. Where I'm still not clear is if I also need to have less than 30% utilisation on each individual card. To my mind that makes a nonsense of banks encouraging me, up to last year, to take up balance or money transfer offers of up to 95% of the credit limit on their cards.

DCFC79

You do know the credit rating/score you see is only seen by you, lenders see your history.

Tombyrne500

Hi all, 
Can someone please help clarify something for me?
I have a credit card with £3700 limit but only use it for petrol for the car. It rarely breaks £200 month which I pay off in full every month. I also have a £500 overdraft on my bank account which I've never gone into. Is this having a detrimental affect on my credit score? Should I lower my CC limit?

Many thanks, 

Tom 

[Deleted User]

No. 

While lowering the limit might drop, increase, halve or double your credit score, what matters is how lenders see you.  Show them you can handle the low limit you currently have and if you get offered an increase, accept it.