I had someone ask me if reducing their credit limit on their card hurt their credit or add points? I really have no idea. I was curious about this also because my fiance has a 10,000 limit on her mastercard and we have been thinking about calling and reducing that to half as much. I had some conflicting answers on another board so someone refered me to here. Is there a site that could state whether or not it's bad to reduce your credit. I do know that you want to keep your debt at or below 25% of your limit and also your score revolves around your debt to income ratio. Thanks
Hi, There was a post a couple of days about this but I cannot find it. I know someone said that the most important thing was to not have a large balance on your cards also. But I am also guessing that if you have all your cards maxed out, you score will hurt no matter what. I hope I am answering your question, and even if I didn't, at least your post is getting moved up
Ideally you want to keep the utilization on your cards below 15%. That's both individual cards and total credit line. Now as far as your regular FICO credit score goes, having $8,000 to $12,000 worth of credit line, preferably not carrying a balance month to month, is probable the optimum for having a good score. More never hurts and you probably get a very small additional boost if you have about $25,000 worth of total credit line. Now, when you are applying for a mortgage on the other hand, a bank would probable consider say perhaps $25,000 to $100,000 worth of unused revolving credit a risk and then it would count against you in terms of their proprietary credit scoring system. The short answer is don't ask for a credit line reduction.
