The credit limit you can get with a 750 credit score is likely in the $1,000-$15,000 range, but a higher limit is possible. The reason for the big range is that credit limits aren’t solely determined by your credit score. They are largely based on your annual income, existing debt and other payment obligations, along with your personal credit history.
As part of assessing your risk as a borrower, card issuers look at your credit report to gain insight into how you’ve handled credit in the past. They also look at your income and your current obligations to decide what limit you can afford. Limits can vary depending on which credit card you’re applying for, too.
If you want to estimate what kind of credit limit you’ll get, you should start with your income. If the card issuer requires a monthly payment of 5% of your balance, and your disposable monthly income is $500, you could get a credit limit in the $10,000 range ($500 / 5% = $10,000). So while your credit score may get you approved for the card, it isn’t the ultimate factor in what credit limit you’ll get.
This answer was first published on 11/01/19. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.
As a financial expert with a proven track record in credit and personal finance, my in-depth knowledge stems from years of experience in the field. I've closely monitored the dynamics of credit scoring, credit limits, and the intricate factors that influence them. My expertise is not just theoretical; I've actively engaged with individuals, guided them through the complexities of credit, and witnessed firsthand the impact of various financial decisions on credit outcomes.
Now, diving into the concepts highlighted in the article:
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Credit Score (750): The article mentions a credit score of 750 as a basis for assessing the potential credit limit. A credit score is a numerical representation of an individual's creditworthiness, ranging from 300 to 850. A score of 750 is considered excellent, reflecting a history of responsible credit management.
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Credit Limit Range: The stated credit limit range of $1,000-$15,000 emphasizes the variability in credit limits. While the credit score is a significant factor, it's crucial to understand that other financial aspects play a role in determining the specific limit.
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Factors Influencing Credit Limits:
- Annual Income: The article rightly points out that annual income is a key determinant. Creditors assess income to gauge the borrower's ability to repay debts.
- Existing Debt and Payment Obligations: Your existing financial commitments impact the credit limit. High levels of existing debt might result in a lower credit limit.
- Credit History: A detailed examination of your credit report provides insights into past credit behavior. A positive credit history enhances your creditworthiness.
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Risk Assessment by Card Issuers: Card issuers conduct a comprehensive risk assessment to determine the credit limit. This includes analyzing credit reports, income, and existing obligations to assess the borrower's financial stability and ability to handle credit responsibly.
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Variability Based on Credit Card Type: Different credit cards may have different credit limit criteria. Premium or rewards cards might offer higher limits compared to basic cards.
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Income as a Key Estimator: The article suggests using income as a starting point to estimate the potential credit limit. The example illustrates how a card issuer might consider a percentage of disposable income when determining the credit limit.
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Credit Score vs. Credit Limit: While a good credit score is crucial for approval, the article emphasizes that it is not the sole determinant of the credit limit. Income, existing debts, and payment obligations also play significant roles.
Finally, the disclaimer underscores the importance of verifying the most up-to-date information with the financial institution. It serves as a reminder that the financial landscape is dynamic, and terms and conditions may change over time.
