Available credit is the amount of credit which a customer is able to use for purchase. Available credit will exhaust approved limit of a credit card, open account or overdraft account. The amount is the difference between the credit limit assigned to a cardholder account and the present balance in the account. For a credit card, there will be a preapproved credit limit. In a credit score, available credit is a key factor.
A reasonable amount of available credit proves that:
- the customer has successfully obtained credit lines in the past; and
- the customer has the discipline not to use all credit available.