Will a reduced credit card limit hurt my credit score?

Posted by Caitlin on October 26th, 2009

The following post in our Reader Question series is an actual user submitted question. To maintain the integrity of the original question, we do not edit or change reader questions in any way.

Q: My bank is lowering my credit card limit, even though I always pay on time. Will this hurt my credit score?

A: Unfortunately, yes. Lately, many lenders have been cutting credit limits, even for consumers with high credit scores. And the ratio of the balance you carry to your available credit is an important factor in calculating your credit score. Sometimes, a credit limit is cut due to underuse, rather than failure to make payments. So if that is a concern, be sure to use your oldest credit card, or the card with the highest limit, from time to time. Depending on the limit and the balance you carry, you may also be able to offset the negative impact by paying off more of your balance. Or, if necessary, it may make sense to open a new credit account with a high limit.

See our reviews and comparison charts to learn more about credit reports and scores and credit cards.