 TITLE: What Is a Credit Limit and What Determines My Limit? CONTENT: How Can Your Credit Limit Impact Credit Scores?\n-----------------------------------------------\nThe credit limit on your revolving accounts can impact your credit scores because credit limits are half of the credit utilization ratio equation—with the other half being your balance.\nYour utilization ratio is the second most important factor in your credit scores, and is calculated on individual revolving accounts as well as on an overall basis. In either case, lower utilization ratios are usually better for your scores. In fact, consumers with excellent credit tend to have very low credit utilization, while those with lower scores tend to have high credit utilization.\nTo find the utilization rate of an account, review the balance listed for the account on your credit report and divide what you find by the account's credit limit. For example, a credit card that has a $1,000 balance and $4,000 credit limit has a 25% utilization ratio.\nYour utilization ratio can also be especially important because most credit scores only look at your _current_ utilization ratio, making it one of the few major scoring factors you can quickly change. When your balance stays the same, a credit limit decrease leads to a higher utilization rate. However, paying down your balance or getting a credit limit increase leads to a lower utilization rate. END