 TITLE: What to Do if Your Credit Limit Decreases CONTENT: How Does a Credit Limit Decrease Impact Your Credit Score?\n----------------------------------------------------------\nA decrease in your credit limit might cause your credit scores to go down. Why? As noted above, a big part of your credit score calculation is based on your credit utilization ratio.\nYour credit utilization ratio represents all of your credit card balances at a certain point in time divided by the total of your credit limits. So, if the balances on your credit cards add up to $2,000 and your total credit limit is $10,000, your utilization ratio comes to 20%.\nWhen you close a credit card account or a card issuer decreases your credit limit, your overall credit limit declines. Using the example above, let's say you cancel a card with a $2,000 limit, so your total credit limit now is $8,000. Meanwhile, your total balances stay at $2,000. This results in your credit utilization rising from 20% to 25%. If a decreased credit limit results in a credit utilization above 30%, your credit scores can suffer. END