Credit card limit and credit rating

gemma1480

I have a credit card with a limit of £10,000 but only owe about £2500. Should i reduce my limit to give me a better rating and better chance to get another 0% when my promotional rate ends?

[Deleted User]

Keep your limit as it is. You're already using 25%, don't take it higher.

gemma1480

Deleted_User said:

Keep your limit as it is. You're already using 25%, don't take it higher.

Sorry, don't take what higher? I don't plan to use the credit card but wanted to know if its best to leave my limit at £10,000 or reduce it

[Deleted User]

As I said, leave it as it is. You don't want your utilisation to go higher. 

If you dropped your limit to say 5k, it would go up to 50%.

MalMonroe

gemma1480 said:

Deleted_User said:

Keep your limit as it is. You're already using 25%, don't take it higher.

Sorry, don't take what higher? I don't plan to use the credit card but wanted to know if its best to leave my limit at £10,000 or reduce it

As zx81 says, it's better to leave the limit as it is for the time being because it reflects badly on your credit report when you are using 50% (or more) of your available credit. If the limit is lowered then your utilisation will look higher. As it is, your use of the card appears quite low and you don't seem to be desperate for money. Just because your limit is high doesn't mean you have to use it either.

I would advise checking your credit reports regularly too. Nobody but you ever sees your credit rating/score. But lenders are able to see how you manage your finances.

gemma1480

Deleted_User said:

As I said, leave it as it is. You don't want your utilisation to go higher. 

If you dropped your limit to say 5k, it would go up to 50%.

Thanks i understand now 🙂👍

Alex9384

Also, reducing your limit may be seen as a negative factor by other lenders.

When other lenders look at your credit reports (during credit check), they don't see whether it was you reducing the limit or your card provider reducing it. They might assume your card provider reduced it because they didn't trust you that much anymore. Increasing your limit may have a positive effect as it shows other lenders that your current provider trust you enough to offer you more credit. I increased my credit limit from 10k to 11k couple weeks ago, even though I'm using just 4% of it. You don't need to increase yours but don't reduce it unless you can't control your spending, which seems not to be the case here.

martinbainbridge1975

As above keep it the same, I had 3 cards with a total limit of £11500, got rid of 2 as promotions had finished and kept 1 which had a promotion on it, while on the surface reducing limits appears a responsible act lenders don't always see it that way