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How Are Credit Line Decreases Impacting Consumer Credit Risk?

Insights - As lenders reduce or close credit lines to mitigate exposure, new research explores its impact on FICO scores

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With recent news headlines like “Lenders slash credit for responsible borrowers,” there is no doubt that the issue of credit line decreases has become top-of-mind—and not just for lenders. News media, the government and consumer advocates have all taken notice.

Certainly, the lender practice of reducing credit lines and closing accounts is not new. For decades, lenders have employed this risk mitigation strategy when customers have missed payments or otherwise shown high-risk behavior.