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credit advice? Free?*

a friend of mine asked me, and i couldnt find the answer online... does anyone know if lowering your credit limits on your cards impacts your credit score? (i understand you should try to keep the card debt under 40% of the limit....) Also does anyone know of any sites or companies that offer free advice... (not advice website... but where she could ask questions and get answers.) If its not free... but a good site... that would be helpful too! thanks.

Answers:

1) Sure, lowering the credit limit on your credit cards does affect your credit score. You see, the higher your credit limit, the more trust worthy/ responsible the banks and lenders think you are, hence a better credit outlook and score. It is a good idea to have as high a limit as possible, though you do not want to spend more than 30% of your available credit at any given time. In the case where this friend is not able to control her spending, a careful new and solution will have to be thought out to address the issue. You are welcome to check out the resources I've listed below. Good Luck.

2) There are a number of non-profit credit counselors....I'm not sure how much help they will be to you. They are listed in the phone book. About the credit limits, if you lower them you will hurt your credit score. The credit storing formula wants to see you with no more then 30% of your credit being used. So lets say you have a card $2000 limit and you have a $250 balance. You are using 12% of your credit (very good!) Now lets lower your credit limit to $1000. You are not using 25% of your limit. Still good but now you are borderline bad credit, because they want you to be under 30%. This change in your credit limit will have a bad effect on your score.

3) Hi, I used "Credit Solution" to settle my debt and improve my credit score.They managed to reduce my debt up to 58%.It's legitimate.I came across this company on NBC News Special Edition.Check it out here: http://shrinkurl.us/vfq

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