You Can Boost Your Score By Asking To Lower Your Limit
Sometimes a lender will tell you that your score will be improved by asking a creditor to lower your limit. Once again nothing could be more opposite. If you lower your credit limit the only person that will benefit is the lender who can then offer you a loan with a higher rate of interest.
Narrowing the gap between the credit you have available to you and the credit you use can have a terribly negative effect on your score. It doesn’t matter if you are the one who asked for the reduction, the FICO calculation does not distinguish between the lower limits that you may have requested and the limits imposed by a creditor. All it will calculate is that there is less space between your balance and your limit and drop your credit score accordingly.
So ignore any lender that tells you to ask for lower limits to impress a company or credit bureau– it will only end up costing you a higher interest rate!