COVID-19 May Have Covertly Crashed Your Credit Card Limit — and Your Credit Score

Some issuers will tell you before they decrease your limit, but they don’t have to. Your credit limit could plummet without you even knowing it — and so could your credit score.

If you haven’t checked your score in a while, it’s time to figure out whether you’re an unwitting victim and take steps to fix it.

Why would a lower limit hurt my credit score?

A lower limit might force you to be more conservative with your debt, but it can also sap your power to borrow money for things you need, like a home or car.

One of the biggest factors that makes up your credit score is your credit utilization ratio. This measurement of credit used versus credit available is responsible for 30% of your FICO score (the most popular scoring method).

Credit bureaus like people who borrow less than they’re able. For a good score, your credit card balance shouldn’t exceed 30% of your spending limit. Using 10% percent or lower is even better.

But when your credit limit drops, the amount you’re currently borrowing suddenly becomes a much higher percentage of your available credit. Your utilization ratio spikes, which then hurts your credit score.

If you’re concerned about this happening to you, consider signing up for a free credit monitoring service that will tell you when your score drops for any reason, like a mistake on your credit report.

More: Looking to raise your FICO score? Try Experian Boost™ to get credits for paying your phone bill, utilities, and more.

What can I do if my credit limit gets slashed?

Ask for it to be restored. The first step is to simply ask your credit card company to reverse the change. Call the number on your card and ask why your limit was cut. It wouldn’t hurt to remind them how long you’ve been a customer. If you’ve always paid your bills on time, you should leverage that, too. And saying “please” still goes a long way.