Why being at your credit limit reduces your credit score
If you are at or close to your credit card or overdraft limits then you are likely to be refused a loan.
If you are at your credit card limits this may give a lender the impression that you are using the cards to live beyond your means. Furthermore, if lenders suspect you’re using credit to pay for day-to-day living expenses, you may be declined.
Some lenders work on the basis that if you are above 50% of your credit card limits a loan application will be declined.
Just making minimum payments? That’s not a good sign either.
Some creditors will have access to your credit card and overdraft balances over time. Should these be increasing, it may be a decline.
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