Chances are if you have a good credit score your utilization is pretty low.  Those with excellent credit score are usually around 10% to 15%.  This will more than likely leave you with thousands of available credit.  The thought of lowering limits has come across the mind of many people with the idea of, “I don’t need all this credit.”  Chances are they are right, but lowering limits can be damaging to a credit score.

If you do lower limits your utilization is going to go up.  This is the second largest part of your credit score and is calculated by dividing your balances by your credit limits.  So if you have less of a credit limit to divide by your utilization is going to up: hurting your credit score.

If want to lower limits to reduce your exposure to identity theft the better proactive would be to buy a credit monitoring program.  These watch your credit report for an changes and they even come with identity theft insurance. My recommendation is to get FICO® Quarterly Monitoring.  This is $50 a year and it comes with $25,000 in identity theft insurance and you get to review your credit report and credit score 4 times a year.  This is a steal compared to a 3 in 1 credit report.

So if you want to lower your limits this is OK.  There are times to lower limits like if you can’t control your spending.  You can also tell your credit card company to stop it.  The best thing you could do is to just leave them along and what your credit for any thefts.

Related posts brought to you by Yet Another Related Posts Plugin.