How having too much credit can affect you

In short, yes, you can have too much available credit.


How much available credit is too much?

The answer to “what’s considered too much credit” is not so black and white. But, the factors normally come down to the company that you’re seeking credit or financing from and your personal financial history.


Factors that may cause you to be deemed as having too much credit

Financial institution underwriting policies

Every financial institution has their own underwriting policies. What’s considered “too much” credit at one company may not be a concern at another company.


Your personal financial history

This is probably the biggest factor in the decision to deem you as having too much available credit. The lender will want to limit its exposure to your risk of defaulting on your payment obligations. So, if they feel that approving your request for credit or a loan would overextend you, they’re likely to decline your application. This is especially true if your credit report shows a history of late payments and/or charged off accounts.