With your credit limit, it’s all about balance.
Using too little (or no) credit could harm your score, as you’re not able to prove to lenders how you manage credit.
However, using too much of your credit limit could suggest to lenders that you’d struggle to repay any new debt.
This can cause your credit score to drop.
Why did my credit score drop for no reason?
A drop of 15-20 points or more could be due to higher balances reported on one or more of your credit cards – or it could indicate fraud or something negative impacting your credit scores” adds Detweiler. When your credit score has taken a dive, it’s time to take a closer look and possibly take action.
How does credit score go down?
Since credit scores are not static numbers, many factors can cause them to fluctuate. You don’t have to default on a loan for your score to drop: Even positive things like getting approved for a new credit card can negatively affect your score.
Why did my credit score go up?
Your amount of debt, which includes your “debt usage,”or “utilization” accounts for roughly 30% of your credit scores. So, in a nutshell, getting a higher credit limit — as long as you don’t also increase your debt — can be good for your credit score because it results in a lower debt utilization.