Can reducing the limit on my credit card affect my credit score ?

Answer 1

A lower limit will have a positive effect. Canceling a credit card does not have a negative effect. If you read the fine print the lender can change the terms of your agreement with 30 days notice, at which point you accept the new terms automatically if you keep the account open. The only way to refuse the new terms is to close the account. Because of this you basically have a month to month contract with the lender, and your not defaulting on a contract. It will show as an account closed at your request. If the lender closes the account that's a different story, and it does hurt your credit.

Answer 2

Yes, lowering your credit limit on your credit card can and will have a negative impact on your score. When a person is trying to get credit, or just starting out, they usually start the person off with a low credit limit $300. $500., or $1000. As they prove that they can handle the credit card, their credit limit will be increased.
The best scenario for consumers is to have about 3 cards with high credit limits, and low or no balance. This shows you can handle your credit.

I have one friend who has 15 credit cards, yes 15 credit cards. They all have no balance; he does use each one now and then and pays it off at the end of the month. This is why his credit score is 880. I don’t suggest this though, three is sufficient.

Good luck....

Answer 3

Reducing the credit limit will have a positive impact on your credit score because you will have less financial leverage, so to lenders; you will be less likely to go into lots of debt since you don't have such a high limit!

Answer 4

Requesting a lower limit might have some impact, but closing I know hits the score in a negative way.

Answer 5

Yes. It looks better to have a high limit yet maintain a low balance. This shows responsible borrowing practices as far as creditors are concerned.