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The thought of sky-high credit limits often provokes a strong response in humans. Some fear these limits and their potential. Others faraway for them. So when is a really high credit limit actually a good thing?

High credit limits can produce or break a credit score. The effect depends on how those credit limits are used. For example, a card holder who has an untapped combined credit limit of $100,000 will look great to lenders. They will assume that the person has been financially responsible to have earned so much credit, and even more responsible to have left most or all of it unused. that will open many doors for the card holder.

Now, whether that same card holder suddenly racked up a debt of $50,000, lenders would start turning up their

noses at such a potential risk.

A person’s utilization rate is the key to their success. A high credit limit with little or no debt is the ideal situation. Some consumers find that their utilization rate is much more crucial than their stellar payment history when it comes to hiking up a credit score.

The bottom line? whether you’re been declined for credit, pay down your debt. Ask for credit limit increases on your available credit cards, or open new ones that offer more favorable terms. With great potential comes great responsibility, though; when your limits skyrocket, it will be tempting to take that dream vacation you’ve been putting off. Just keep your cool and keep your eye on the prize: an excellent credit score.

Orginal post by janna