Fair Isaac Company uses five factors to determine a credit score. While the actual credit limit on a line of credit is not a direct factor in a credit score, factors connected to the limit play a role.
Credit Card Limit
A credit card limit is the maximum amount that can be charged on a credit card in a specified period. The creditor sets the amount.
FICO Scores
FICO scores are determined through payment history, amount owed, length of credit and types of credit.
Amounts Owed
Thirty percent of a FICO score is determined by the amount owed to a creditor or a credit card. The amount owed relative to the limit is also a factor.
Impact
The closer a consumer is to meeting or exceeding his credit card limit, the more adverse the affect on his FICO score.
Explanation
Carrying a credit card balance that meets or exceeds the limit is seen as using the maximum amount of credit available. It also increases the consumer's debt ratio. These factors have a direct affect on a FICO score.
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