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Frequent Contributor
MichiganMommy
Posts: 319
Registered: ‎05-31-2008
0

Credit Limit Question?

Once a credit limit has been establised, if you ask the card issuer to reduce the limit, will they and/or do they have to, based on your request? Does this negatively impact your score in anyway?

Updates scores...inching along. Waiting for 7 recent medical collections to fall off!! (seriously working since END of May): EX 519 TU 576 EQ 449
8-02-08 EX 644 TU 647 EQ 575...650s here I come....700club, get ready!!!
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cheddar
Posts: 6,794
Registered: ‎09-29-2007
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Re: Credit Limit Question?



MichiganMommy wrote:

Once a credit limit has been establised, if you ask the card issuer to reduce the limit, will they and/or do they have to, based on your request? Does this negatively impact your score in anyway?



They don't have to comply with your request, but most likely would.
 
Yes, it can hurt your FICO score because reducing your available credit will increase your utilization, all else equal.
 
Why do you want to do this?
 
----------------------------
App free since 7/11/08.
TU 744 / EX 710 / EQ 694 (Starting to slip. :smileysurprised: )
Frequent Contributor
greyhound2007
Posts: 358
Registered: ‎11-05-2007
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Re: Credit Limit Question?

     Wouldn't it hold true, say you have a 5000. CL and your high charge is 4500. and you ask for a CLD to 4000., would it not look like you had at some point been over limit?  JMT's  Good Luck Vicki
~We'll Never Say Goodbye~
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Moderator Emeritus
cheddar
Posts: 6,794
Registered: ‎09-29-2007
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Re: Credit Limit Question?

[ Edited ]


greyhound2007 wrote:
     Wouldn't it hold true, say you have a 5000. CL and your high charge is 4500. and you ask for a CLD to 4000., would it not look like you had at some point been over limit?  JMT's  Good Luck Vicki


On manual review and at first glance, yes.  However, FICO won't care.
 
Even on manual review, however, full reports from the CRAs do show the CL history for the prior two years, so a manual reviewer would be able to see that the CL had been reduced.
 
That raises another interesting point, though, and another reason, IMO, why it's not a good idea to request a CLD.  A manual reviewer will see that your CL had been reduced, but will not see that the reason for the CLD was that the cardholder had requested it.  The reviewer will most likely assume it was reduced due to creditor-initiated adverse action, which could lead to all sort of assumptions on the part of the reviewer.
 
I'm still curious why the OP wants to do this.
 


Message Edited by cheddar on 06-18-2008 12:32 PM
----------------------------
App free since 7/11/08.
TU 744 / EX 710 / EQ 694 (Starting to slip. :smileysurprised: )
Frequent Contributor
MichiganMommy
Posts: 319
Registered: ‎05-31-2008
0

Re: Credit Limit Question?

Honestly, I don't know why...I am asking this Ques for my sister.... She is slowly becoming a FICO Friend and will likely be joining us soon... I will ask her and chime back in...
Updates scores...inching along. Waiting for 7 recent medical collections to fall off!! (seriously working since END of May): EX 519 TU 576 EQ 449
8-02-08 EX 644 TU 647 EQ 575...650s here I come....700club, get ready!!!

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