Average credit limit on open bankcards is too low

VantageScore code number

Code numbers can differ by bureau and score version. The wording of the statement is what to match.

What puts this reason on your score

This statement averages the limits on your open bankcards. Three cards with limits of $500, $1,000 and $7,500 average $3,000. Add a new $300 card and the average drops to $2,325.

It often appears on otherwise strong files. A sample TransUnion score summary published by 700Credit shows it as the second reason on an 805 VantageScore 4.0, behind 'Lack of real estate secured loan information.' On a high score, a code like this marks where the last points are.

What to check on your credit report

• The limit on each open bankcard
• Small-limit cards you no longer use
• Any card whose reported limit is lower than the real one

What you can do about it

• Ask for increases on the cards you already have.
• Think twice before opening a low-limit card. It lowers the average.
• Closing a small card raises the average but cuts available credit, so weigh that card by card.

How soon a change can show

A change shows after the issuer reports the new limit, usually with the next statement.

If you are applying for a mortgage

If your score is already high, leave this code alone before a mortgage. Opening or closing cards in the months before an application can create bigger problems than the one it solves.

Guides that go deeper

• What a higher credit limit does to your scoreA higher limit lowers your utilization only if your balance stays put. How the math works, when the request costs a hard pull, and when to skip it.
• How many credit cards should you have? The math behind the numberFICO publishes no ideal number of credit cards. What matters is what each card does to utilization, account age and recent applications. The math, worked out.
• What closing a credit card does to your scoreClosing a card cuts your available credit right away but doesn't erase its history for years. See the utilization math and when closing is still the right call.
• What your credit score reason codes are telling youReason codes list what held your score back the most, in order. What the common ones mean, which you can act on, and which to leave alone.