Can no limit credit card lower your credit score?

Can a no-limit credit card hurt your credit score?

If you have a credit card with no credit limit it can lower your credit score. Part of the credit score calculation is credit utilization, meaning how much or what percentage you owe of your total credit limit. E.g. if your credit card balance is $5000 and the total limit is $10,000 your credit utilization would be 50%. Higher credit utilization means lower credit score.

The problem with cards that do not have a credit limit is how the upper limit - which doesn't exist - is reported to the credit bureaus. The card company might report $0 - zero or nothing at all. This could pose quite a problem when calculating credit utilization. The other way the card company may report your limit is by taking the highest ever balance you have had on the card and reporting that number. Let's say the highest balance you ever carried on the card was $10,000, and that the balance currently is $8,000. That would be 80% credit utilization - and definitely a factor lowering your credit score.

What can you do?
If the card company reports nothing - close the account. Keeping the account open will lower your credit score.
If the card company reports the highest balance - depending on if you have now or before carried a high balance, either make purchase with the card to bring up the balance and then immediately on the next bill pay it off - so it will start showing low credit utilization and should improve your credit score. If you already have a high balance on the card pay it off.