Skip to main content

Credit Information Back to all articles »

Connection Between Your Credit Scores & Your Credit Limits

Relationship between your credit limit and your credit score

Did you know that your credit card limits and your credit scores are related? It's actually a somewhat symbiotic relationship. Your credit limits may affect your credit score and your credit score may affect your credit limits.

Impact your credit limits could have on your credit score

You may think that paying your bills on time is all you need to have a good credit rating. However, there are several factors involved in creating your credit score.

One credit scoring component is the amount of credit you have available in relation to the amount of credit you use. Your credit limits are available credit and are reviewed when computing your credit score. It is important to note that if you are using the bulk of your credit limit, it can potentially damage your credit score.

Increased credit limits could reduce your debt-to-credit ratio. So, if you pay your bills on time, but would like an additional cushion in your limit, request a higher limit.

How your credit score may affect your credit limits

There are several factors involved when a credit limit is created, but the two main components are your credit score and your gross annual income. These same metrics are used when a credit line increase is extended on a current card.

The practice of automatic credit line increases has declined in the slower economy. However, if you have a good credit score and you pay your credit card bill on time, there is still a possibility of getting a credit limit increase. The best way to do this is to just ask.

Back to all articles »