Quote:
Originally Posted by Christien
Mark is absolutely right. It's a commonly-held misbelief that high credit limits with low balance help your credit. That's not necessarily the case. A lender can look at a combined limit of say, $40K and say, well, tomorrow this person could go out and max out all of these credit cards. So that 40K credit limit just became a liability against you.
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Both are true - having a high limit with low balances does increase your credit score, as they track how responsible you are with the credit you have (always maxed and paying minimums v. paying off monthly). For something like a home purchase, a lender might ask that someone close one of their credit accounts to reduce their limits, though that isn't really common from what I hear.