Can a Credit Limit Decrease Hurt Your Credit Score?

Quick Answer

Requesting a decrease to your credit limit can hurt your overall credit score by impacting your credit utilization rate. The more of your credit limit you’re using, the lower your credit score can be.

A woman sitting on the couch uses her phone while holding her credit card in her other hand.
Dear Experian,

Your creditor raises your credit limit. As a consumer, you are not comfortable with the increase, and you would like to lower the credit limit. What impact does this have on your credit score?


Dear YLO,

An increase in your credit limit can help your credit scores. So, unless you are just too tempted to charge up to the new limit, it may make sense to leave your new limit as is.

How Does My Credit Limit Impact My Scores?

The reason a credit limit increase can help credit scores is that it can lower your utilization rate, or balance-to-limit ratio. Your utilization rate shows how much of your available revolving credit you're using and is the second most important factor in credit scores, second only to your payment history. The lower your utilization rate, the less risk you represent to lenders.

Experts recommend keeping your utilization rate below 30%, but below 10% is even better.

How Can I Calculate My Utilization Rate?

The utilization rate on your credit card is calculated by taking the card balance and dividing it by the credit card limit on the account. If you have more than one credit card, you can calculate your overall utilization rate by adding up all of your credit card balances and dividing that number by the total of all your credit limits.

For example, if you have two credit cards, each with a $5,000 limit, you have a total of $10,000 available. If one card has a $5,000 balance and the other a zero balance, your overall utilization rate is 50%. However, if the limit on one card is increased by $5,000, your limit total increases to $15,000. Your overall utilization rate immediately decreases to 33%.

You can ask your lender to reduce the limit or lower it to its previous level, but that likely won't help your credit scores, and it could hurt them. Similarly, closing a credit card account can negatively impact your scores, even if you are no longer using it. That's because closing the card eliminates the available credit limit on that account, which in turn can increase your overall utilization rate.

How Do I See What's Impacting My Scores?

If you want to learn more about how the different elements in your credit history are affecting your score, you can start by ordering your free credit score from Experian. When you get the score, it will include a list of the top risk factors that are currently impacting you the most. By focusing on improving those factors, you can begin to increase your credit scores.

In the meantime, some steps anyone can take to begin improving their scores include:

  • Bringing any past due accounts current: If you have any accounts that are currently past due, bringing them current and making sure all payments are made on time going forward is key to strengthening your scores.
  • Paying off collection accounts: If you have an outstanding collection account on your report, paying it off could improve your scores right away. That's because some scoring models exclude collection accounts from the score calculation once they are paid off.
  • Paying down credit card balances: Increasing your credit limit isn't the only way to improve your utilization rate. If you are carrying balances on your credit cards month to month, paying them down or off will lower your balance-to-limit ratio and also save you money on interest fees in the long run.
  • Signing up for Experian Boost®ø: You can get credit for your on-time utility, cellphone and streaming service payments that wouldn't otherwise be added to your credit report with Experian Boost. By using Experian Boost to add these payments to your Experian credit report, you can help build your positive payment history. You will receive an updated credit score at the end of the sign-up process so you can see how your score was affected.

Thanks for asking.

Jennifer White, Consumer Education Specialist