One of the many ups and downs you may have experienced this year was a change in your credit limit — specifically a decrease. According to a survey from earlier this year, one in three card holders reported their credit limit being lowered. Here's what to know about why companies may cut your limit and what you can do to ensure you keep a top-notch credit score.

WHY CREDIT LIMIT CUTS HAPPEN

Your credit limit can be lowered for a number of reasons, including late or missed payments, account closings or card inactivity. But in times of economic downturn, credit issuers have been known to scale back on the amount of credit they make available. According to Sean Messier, associate editor at Credit Card Insider, when the economy is in decline, people tend to have less money. When people have less money, they tend to borrow more and take longer to pay off their debts.

“Lending money is a risk from the get-go, and that risk is amplified significantly during times of economic turmoil,” he says. “Lowering credit limits allows credit card issuers to cut their losses at a time when it’s much harder than usual for many people to pay their bills.”

HOW A CREDIT LIMIT DECREASE CAN AFFECT YOUR SCORE

If you noticed your credit limit was lowered, it might not seem like a big deal, especially if you never come close to maxing out your card. But even if you stay well below your credit limit, having it reduced can still affect your credit score because of credit utilization, or the percentage of available credit you are using.

Let’s say you have a balance of $2,500 and your credit line is $10,000. This would you give you a credit utilization of 25 percent. But if your credit limit is lowered to $7,000, your credit utilization would increase to 36 percent. Without any change on your part, you would be using more than 30 percent credit utilization. And because many credit scoring formulas consider credit utilization to be a significant factor that affects your credit score, an increase in your credit utilization could result in a drop in your score — particularly if you cross over 30 percent of your credit utilization.

WHAT TO DO AFTER YOUR CREDIT LIMIT IS LOWERED

Your issuer can adjust your credit limit without letting you know, so “if it’s important that you maintain the same credit limit, reach out to your issuer to discuss the situation as soon as you realize it’s been decreased,” Messier says. “If you’re a longtime customer with a strong payment history, you may be able to talk your way back to your original credit limit.”

In the meantime, if you are able to pay your bill in full continue to do so on time each month. And if you can pay your bill before the statement closing date, even better. “Whatever balance you’re carrying when your statement period ends is what’s reported to the credit bureaus, even though you typically have a few weeks to pay that balance off in order to avoid interest charges,” Messier says. “By reporting a low or zero balance, you’re showcasing low credit utilization and, in turn, minimizing the damage a limit decrease could do.” If you’re not able to pay your bill in full, pay at least the minimum and set up a plan to pay it off in full.

WHAT TO DO IF YOUR ISSUER WON’T BUDGE

“If you’re unable to get your limit cut reversed, just keep using your credit responsibly and lower your debt load as much as possible,” Messier says. If you’re carrying a balance, pay at least the minimum while you make a plan to pay down your credit card debt.

While opening a new credit card can increase your credit limit, you should only consider this if you’re able to pay it off in full and on time each month. (Note that opening a new account is considered a hard inquiry on your credit, which might result in a temporary dip in your credit score).

A final tactic to consider if you’re unable to get a credit limit increase: Check in with your issuer on a regular basis. “This might seem like overkill, but policies change over time, so you might be able to score a limit increase if your issuer relaxes its outlook,” Messier says.

OTHER WAYS TO BOOST YOUR CREDIT SCORE

Even if your credit limit wasn’t lowered, there are additional things you can do to help improve your credit score:

  • Keep your unused credit card accounts open.

  • Review your credit report for inaccuracies and dispute any errors you may find.

  • Call your issuer and ask for a credit increase. If approved, this can help give your score a boost, even if your limit wasn’t cut to begin with.

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