Does Going Over My Credit Limit Affect My Credit Score? (Experian)

Although it’s possible to go over your credit card’s limit, it’s not recommended when you want to create and preserve excellent credit scores. Exceeding that limit affects your credit utilization ratio, which measures how much of your available revolving credit you’re using. To keep your credit scores high, your credit utilization should stay low.

Technically, a credit limit[1] is the maximum amount you can charge on a credit card. But you can go over that limit in some circumstances. If you do, prepare for repercussions[2], including a lower credit score and credit card fees. Then take action to repair the damage and avoid going over in the future.

Going Over Your Credit Limit May Affect Your Credit Score

Credit utilization is one of the top two influential factors in the most commonly used consumer credit scoring models—those from FICO® and VantageScore®[3]. These scoring models consider both overall credit utilization—how much of your total available credit you’re using—and utilization per credit card, which is the percentage of available credit you’re using on a single card, when determining your credit scores.

It’s best to keep your credit utilization ratio[4], both overall and on individual credit cards, under 30% to avoid seriously impacting your credit scores. So, for example, if you have three credit cards that together allow you to borrow a total of $10,000 and your combined debt is less than $3,000, you’re in a fine position. And if you have a card with a $1,000 credit limit, keeping your balance under $300 is best. The less you owe, the better for your scores.

Using credit cards and paying off your balances every month or keeping balances very low shows financial responsibility. Maxing out your credit cards and even going over your credit limit, however, is an indication that you may be struggling financially. That can lower your credit scores and make it more challenging to get approved for other forms of credit.

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