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ABSOLUTELY NOT!! This is VERY important! No one has yet been able to determine exactly what the 'credit scrore equation' is. But it is known that the most important aspect relating to how credit cards affect your credit score is actually, read carefully, "The ratio of total balance to total credit limit." The way I interpret that, it is extremely foolish to lower your available credit line with a credit card that you intend to keep. *more pointers* You should make ALL payments on time. The longer you've held your credit account, the better it will contribute to your score (ie. Payoff and close your NEWER accounts first!) Department store cards should also be a top priority to payoff and close

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โˆ™ 2006-03-07 00:53:14
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Q: Will it help your credit score if you lower your available credit limit?
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If you reduce your credit limit on a credit card does it affect your credit score?

yes, it will lower your FICO score.

Are the odds great if you don't have a great score but have paid this particular card always on time that they won't lower your credit limit?

If you pay credit card 1 on time and are never late, but your overall credit score is poor, are chances good that they won't lower the credit limit on credit card 1

How would a collection of 230 affect a person with 50000 in available credit and 730 score?

Your credit score can be decreased by having collection accounts listed, a judgment, late payments or if you have too much available credit. If you have that much credit, you would want to contact the credit issuer to lower your credit limit. Your debt should never be more than 35% of the available credit. Timely, consistent payments to your creditors and low credit limits will help increase your credit score.

Does having more than one credit card improve your credit score or hurt it?

It can improve it since having a high percentage of credit limit can lower the score. Better to split the expenses and use about half of each cards limit and then pay each online ontime in full to improve the score did u know that using a low percentage of credit limit can lower your score? Aim for 50% and pay it all on time.

A lower credit score will help with what?

To answer the question, no a lower credit score won't help with anything. Maybe you were trying to ask how to help your low credit score. A few things you can do is pay your bills on time, increase your debt to limit ratio, diversify your credit, and remove negative items and inquiries from your credit.

Why is my student loan reporting a credit limit?

The credit limit is the initial amount of your student loan. It helps keep your student loan from skewing your debt to credit ratio which can lower your credit score and make it more difficult to get credit.

How can you obtain a better credit score without much work?

BY PAYING YOUR BILLS ONTIME, KEEPING THE BALANCE UNDER 40% OF THE CREDIT LIMIT. The lower the debt to credit limit ratio, the better. I would try to stay under 25% of your credit limit.

What are the ramifications of a poor credit score?

Having a poor credit score impacts one's ability to get a credit card and even a mortgage. If one is still able to get a credit card, the interest rate is likely to be higher and the credit limit lower.

Why can a credit card company lower your credit limit without your consent?

The CC Company may have seen an increase risk when they saw on an updated credit report/score. It could be a late payments, collections or any other derogatory item on your credit report that triggered it. The CC have the power to limit or increase your credit limit to lower their liability.

What kind of credit score to you have to have for a fingerhut account?

Fingerhut will often approve people who can't get approved for other credit, so credit scores as low as 600 or lower might be approved. The amount of credit you get from Fingerhut will depend on your credit score, so if you have a lower credit score, you may not get a lot of credit right off the bat, but if you keep paying on time, they will continue to raise your credit limit.

Do you receive credit every month with your credit card if you have spent your limit and payment is not yet due?

Yes and No. Yes, it important that you pay your credit cards on time. And the "No" is because if you spend to your limit it is not good for your credit score. Why and how is your credit score determined? Because 35% of your credit score is paying your credit cards on time and the other 25% is your debt to available credit ratio (for example, if your credit limit is $1,000 and you only have one credit and you spend $1,000 you are using 100% of your available credit which has a negative impact on your credit score) the credit agencies like to make sure that the ratio is less than 30% of your available credit which would be $300 or less per month on your credit card. The rest of the 40% of inquiries, length of credit history and other misc. things they look at.

Can you ask for a lower interest rate on your credit card even though you have poor credit?

You can, but be careful. If your credit score has gotten worse, they could even LOWER your credit limit. Happened once to me long ago. And by the way, they can automatically check your credit and change your credit limit or interest rate. Without you even knowing it.

How is someone's credit card limit determined?

Someone's credit card limit is determined by examining their credit score. Typically, one who has good credit will receive a much higher credit card limit than one who has a bad credit score.

Does increasing the limits on a credit card hurt your credit score?

There is no definitive answer to questions about credit scoring. The computations used to determine any individuals' credit score is emphirical, complex and relates to all the information reported on them. Two factors which can impact credit scoring are inquiries and the proportion of money owed to credit available (credit limit). Generally, your credit card company does periodic inquiries anyway and would, most likely, do one in conjunction with a credit limit increase. This MIGHT negatively impact your score. If increasing your credit limit causes your proportional debt to decrease, this MIGHT increase your score. Once again, any change in the calculation would factor in all the information reporting on you at the time. The initial request for additional credit may temporarily lower your credit score, but having more available credit can actually improve your score, as it makes is easier to maintain a 30% (or less) usage of available credit. For example, let's say you have a $5000 credit limit among all of your credit cards and you owe $2500 on all of the cards combined. You are using 50% of your available credit. But if you get your credit limit raised on one card so that you now have $10000 in available credit, you're now using 25% of your available credit, even though you still owe the same amount of money ($2500 in charges with a $10000 limit = 25% credit usage). So, you're below the 30% threshold that the FICO people like to see, which gives the impression that you know how to manage money and live within your means.

How can paying down your credit cards lower your credit score?

Paying down your credit cards won't lower your scores-- but paying off and closing the credit cards will lower the scores. You want to show that your cards are not maxed out and you have plenty of room between the credit limit and the balance .

Does checking your credit score often lower your credit score?

No. The only thing that can lower your score is when you apply for new credit. Many companies do background checks that include a credit report, but this will not lower your score. There are ways to avoid lowering your score on accident. Make sure you're not falling into these credit traps.

Why does closing a credit card have a negative impact on your credit score?

Because 30% of your credit score is based on your debt to available credit ratio. For example, if you have 3K in credit card debts and if you add up all your available credit limit from all your credit cards for a total of $10K. =your current debt/available credit = 3K/10K = 30% Ratio (Ideal Ratio!) Now you close one account with an available credit of 4K, now decreasing you available credit to $6K =your current debt/available credit = 3K/6K = 50% Ratio The higher the ratio the more negative it will affect your credit score.

If you close an account will it improve your credit score?

Closing accounts can actually lower your credit score. The reason is that a portion of the score is made up by considering the amount of credit available to you versus the amount you are actually using. For example, if you have a credit card with a $10,000 limit and a $5,000 balance you are using 50% of $10,000 available. If you pay off the $5,000 and leave the account open you are using 0% of $10,000 available and that helps your credit score. If you pay it off and close the account the available credit goes to zero which is worse for your score. Another component of your credit score is how long an account has been open, so you're better off having the same account for years rather than closing an older one and opening a new one. If you have too many accounts and really want to close some of them it's best to close the newest ones first and hang onto an account with a high credit limit and a good payment history. Closing any accounts will likely lower your score temporarily, but it will bounce back over time.

How much can buying a new car lower your credit score?

Buying a new car changes what's called your utilization ratio. This is the amount of debt you to the amount of credit you have available. The lower your ratio, the better it is for your credit score. Additionally, before lenders give you a car loan, they'll want to see your credit score. Checking your score for this reason causes a "hard inquiry" to be placed on your credit report. Hard inquiries can lower your score and remain on your credit report for up to two years.

Does accepting a pre-approved credit card lower your credit score?

Generally, anything you do that takes on more debt will lower your credit score.

If you transfer all your credit card balance into your personal line of credit is it going to lower your credit score?

Probably slightly but just for a few months. Assuming you keep the credit card account open. I Factors that make score go up: overall you'll have more available credit so your debt to credit ratio will be lower because your credit card will now have 0 balance and therefore the entire limit of credit. Factors to make score go down: you are opening a new loan account and new accounts always hurt your score for the first few months. Additionally, you will be maxed out on the loan (technically the limit on a loan is the amount they lend you) until you start paying it down. A good mix of loan and credit cards is good for your score in the long run though.

Can a car loan help your credit score?

Yes it can if you keep the payments up, on time. Your bills for rent, electricity, phone and so on are also a big part of your credit score. Your credit score can be a little complicated but, for the most part, if you pay your bills on time your credit score will be a good one. Probably the most complicated part for average people is a credit card. If you have a credit card and your balance always runs pretty close to your credit limit, your credit score will be lower. On the other hand if you owe 10 to 15 percent of your limit it shows that you know how to manage your credit.

Does lowering your credit limit on a card hurt your credit score?

Lowering a credit card's limit may cause a credit score to go up, down, or remain the same. Factors that impact a credit score can include: the amount a credit limit is reduced, on-time payments, new accounts being opened and if balances are paid down or increased.

What does a credit score of 9003 mean?

Score not available due to lack of credit history.

How is credit limit determined?

Credit limit is determined by the information given to the company during their application. The person's income and credit score play a big part in the limit.