What is a...

Credit Limit

A Credit Limit is the maximum amount of credit that a lender will extend to you, which varies depending on their risk appetite.

How can I check my Credit Limits?

Lenders share details of your credit accounts with the Credit Reference Agencies. If an account has been reported with a Credit Limit, this will be visible to any lender checking and you can check it for yourself by viewing your Credit Report.

checkmyfile gathers your information from Equifax, Experian, TransUnion, and Crediva into a single online report, making the process of checking your information quick and easy.

You can view your Multi Agency Credit Report free for 30 days, and then for just £14.99 per month. You can cancel online whenever you like.

How are Credit Limits calculated?

A Credit Limit is based on a variety of factors ranging from an individual’s ability to meet payments as they fall due to the unique criteria of the lender. A Credit Limit is also in part based on the borrower’s recoverable assets in the event of default.

Credit limits are most often seen by consumers on credit cards, as they dictate how much you can spend each month. In that instance, they are treated much like an overdraft limit.

The credit limit imposed in most cases is fixed for the life of the product, except in the case of credit cards that may be raised or lowered at the card issuer’s discretion.

Why would a Credit Limit be reduced?

Most credit card providers retain the right to reduce your Credit Limit as a way of reducing their risk. This can happen as a result of missed payments, but even limited use of the credit card can be a reason to lower your limit.

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