Consumer Comeback Blog

Credit Score Glossary: Credit Limit

Credit Limit: The maximum amount of money that can be charged to a credit card.

A consumer’s credit limit is dependent upon different factors—including ability to make payments—and consumers can request an increase in credit limit of their creditors, though the creditor is not obligated to grant such a request.

Credit limit can indirectly affect a consumer’s credit score through the debt-to-credit ratio, which is a factor in determining a credit score. Credit scores are generally higher if consumers keep their credit usage at 30% or less of the total available credit. For example, if a consumer had a credit card with a limit of $1,000 and charged $500 on it, the consumer would be using 50% of the available credit.