Author: Dan Rafter / Source: Wise Bread
Credit card companies have the freedom to raise or lower your credit limits as they see fit. If you’ve been a long-standing customer who’s always paid your bills on time, your credit card issuer might raise your limit as a reward for your diligence.
But if you’ve missed payments — even on a different card or loan — your credit card provider can lower your limit.
Or even if you’ve made all your payments for all your loans on time, your creditor might decide that other financial moves you’ve made increase your risk of missing payments in the future.Keepings tabs on you
You probably know that whenever you apply for an auto loan, mortgage, or student loan, creditors will review your credit reports looking for signs of risky financial behavior. Missed or late payments damage your chances of getting new credit or leave you with high interest rates if you do get approved.
But you might not know that your credit card providers can check your three credit reports — from Experian, Equifax, and TransUnion — even after you’ve opened an account with them.
Remember, credit card companies are continuously loaning you money. They want to make sure that you’re not at risk to stop repaying what you borrow. One way they do this is by pulling your credit reports.
If your card issuer finds troubling signs on your credit reports, it might decide to protect itself by lowering your credit limit.
When you open a new credit card account, the documentation you receive will spell out that…
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