credit report, largest credit limit too low?

4 replies
Found 14th Dec 2016
Clearscore is showing a negative on my report for my largest credit limit being too low. I have one credit car with a fairly low limit, but a loan etc which is much higher. To remove this mark am I better off applying for a higher limit card or asking the current provider to up my limit? I never spent to the limit, I use it sometimes just so it's active.

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Think of it like this, if you have a credit card with a limit of £500, spending £100 on it means you are using 20% of your available credit. A £100 spend on a £5000 limit is a 2% usage rate. Both are a £100 spend, but one will affect your credit score more than the other. If you can, up your limit with the same card, don't apply for another one.
Edited by: "TPGone" 14th Dec 2016

Original Poster

ThePasty

Think of it like this, if you have a credit card with a limit of £500, … Think of it like this, if you have a credit card with a limit of £500, spending £100 on it means you are using 20% of your available credit. A £100 spend on a £5000 limit is a 2% usage rate. Both are a £100 spend, but one will affect your credit score more than the other. If you can, up your limit with the same card, don't apply for another one.


That makes sense.. thank you

ThePasty

Think of it like this, if you have a credit card with a limit of £500, … Think of it like this, if you have a credit card with a limit of £500, spending £100 on it means you are using 20% of your available credit. A £100 spend on a £5000 limit is a 2% usage rate. Both are a £100 spend, but one will affect your credit score more than the other. If you can, up your limit with the same card, don't apply for another one.



Which situation is better in terms of credit management?

jimbo001

Which situation is better in terms of credit management?



If you've only the one credit card with a high credit limit yet use only a tiny fraction, you are seen as low risk as, although you could spend all of it, you choose not to. Therefore any future lender won't worry about you instantly maxing out any credit and not getting it back off you.
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