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Credit Limit

A credit limit is the maximum amount that a lender will let you borrow. For credit cards, the credit limit is the maximum amount you can put on the card.

Credit limits are important, because they help determine your credit utilization ratio – the amount of credit you’re currently using vs. the amount that is available to you. Your credit utilization rate is a factor in determining your credit score.

How Credit Limits Affect Your Credit Score

If you have more than one credit card, credit-scoring models will consider both the individual credit utilization ratio for each card or account, as well as your credit utilization for all cards and accounts. In general, having a low credit utilization ratio (having a large amount of credit available to you and utilizing only a little of it) is better for your credit score.

Proportion of Balances to High Credit on Revolving Accounts

July 15, 2016

Dear Experian, Can you explain one of the factors for my credit score? The listed factor is “Proportion of balances to high credit on bank revolving or all revolving accounts.” -...

The Effects of Charging Over Your Credit Card Limit

May 19, 2016

Dear Experian, I was surprised to see my credit card was reported over the limit by $19 within five days of the charge occurring. Even though it was paid...

Lowering Credit Limit Can Hurt Credit Scores

October 10, 2012

Dear Experian, I have heard that requesting lower credit limits can hurt your credit scores. Is this true? -MMB

The Impact of Requesting Lower Credit Limits

February 1, 2012

Dear Experian, If I lower my credit limits on my credit cards, does that lower my credit score? If so, why? - PGR