There is always a close relationship between credit scores and the credit limit that a credit card company will provide you. However, credit card providers can lower your credit limit for a variety of reasons. If your credit limit has been decreased but you have good credit, you might be wondering why this happened.
Often times, credit card issuers will lower your credit limit if they see that you are not using a significant portion of your available line of credit. Credit card companies take your credit utilization ratio to see if you are maxing out your credit cards or barely using them.
Although its more likely to have your limits decreased when maxing out your credit cards, you can have your limit decreased for using too little as well.
If your limit has been decreased, here are some steps you should take:
Give them a Call
The most straightforward way to see why your credit card limit was lowered is by calling the company that issued the card in the first place. Just simply ask the representative if they or their teammate can give an explanation of why this happened and if they can reinstate your previous limit.
Check Your Score and Report
It’s shocking to know that almost 20% of all Americans have an error on their credit report and score. An error on your credit report can hurt your credit score by as much as 100 points, scaring companies away from lending you more money.
If you actively used your card yet got your limits decreased, take a look at your credit score and report. Be sure that no suspicious inquiries or accounts are listed under your report.
Start Using Your Card
If your credit limit was reduced due to lack of use, your best bet to get a limit increase is by actively using your card. Although you should never utilize more than 30% of your total available credit, use your credit card to pay for things such as gas and groceries. Since these are already part of your budget, you can simply use a credit card to pay for these. These purchases can also help you build your credit score.
Credit cards have helped millions of people pay for their purchases. Using a credit card is the absolute best way to build credit. If you are buried under a mountain of debt and ready for a fresh start, CrediReady can help. Our nationwide network of trusted and experienced lawyers are prepared to give you a FREE bankruptcy consultation to help you. Take a moment to fill out our inquiry form today to speak with your FREE attorney.