What is your Credit Limit?

Your Credit Limit is the maximum amount of money that a lender or credit card issuer will allow you to borrow or charge on a credit account. The credit limit is determined by the lender or credit card issuer and is based on several factors, including:

1. Credit history: Your credit history and credit score are major factors that lenders consider when determining your credit limit. If you have a good credit history and score, you may be offered a higher credit limit.

2. Income: Your income is a major factor that lenders consider when determining your credit limit.  Your income is not used in your credit score.  There are many people with lots of income and bad credit and lots of people with very little income and a great credit score.

3. Debt-to-income ratio: Lenders also consider your debt-to-income ratio, which is the amount of debt you have compared to your income. If you have a high debt-to-income ratio, you may be offered a lower credit limit, as lenders will view you as a higher risk.

4. Existing credit accounts: Your existing credit accounts, such as credit cards and loans, can also impact your credit limit. Lenders may be less willing to offer a high credit limit if you already have a lot of existing debt or borrowing potential on your credit cards.

Maxing out your credit limit on only one card and/or carrying high balances will have a negative impact on your credit score and make it harder to get approved for credit in the future.