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.