21 May, 2009
Myth 1: You Can Boost Your Score by Asking Your Credit Card Company to Lower Your Limits
Posted by: Steve In: Credit Card Myths| Fico/Credit Score
This one is a variation on the idea that reducing your available credit somehow helps your score by making you seem less risky to lenders. Once again, it’s off the mark. Narrowing the gap between the credit you use and the credit you have available to you can have a negative effect on your score. It doesn’t matter that you asked for the reduction; the FICO formula doesn’t distinguish between lower limits that you requested and lower limits imposed by a creditor. All it sees is less space between your balances and your limits, and that’s not good.
If you want to help your score, tackle the problem from the other end: by paying down your debt. Increasing the gap between your balance and your credit limit has a positive effect on your score.
