No-limit credit cards could lower your FICO score

Martha C. White
Charge cards without limits could hurt your FICO
Charge cards without limits could hurt your FICO

Having a good credit score is important. We here at WalletPop have told you how to get or keep a good credit score, and how to fight back against reporting mistakes that can harm your score. But there's one particular type of quirk that could be hurting your score without your knowledge: cards without preset spending limits.

One very important part of your FICO score is what's called your utilization ratio. That's the percentage of your available credit that you're using during any given period. For instance, if you have a credit card with a $10,000 limit and you have a $2,500 balance, you have what many experts would consider to be an ideal ratio. But if you have a $10,000 credit limit and you're maxed out, you look like a riskier customer. The result: A lower score.