Krediidipuuvõime

Krediidipuuvõime, also referred to as the credit limit, is the maximum amount of credit that a financial institution extends to an individual or business. It determines the maximum balance that can be held on a credit card, line of credit or other revolving credit facility. The term is commonly used in Estonian banking and finance literature, and it plays a crucial role in consumer protection, credit risk management and personal financial planning.

Financial institutions assess krediidipuuvõime based on a combination of factors. The primary input is the borrower’s credit history, reflected in credit scores and past repayment behaviour. A high credit score typically signals lower risk, allowing for larger limits. Other elements include current income, existing debt obligations, employment stability and sometimes collateral value in the case of secured credit. Regulator guidelines may also impose caps on limits relative to income or other metrics to prevent over‑extension of credit.

Once established, the kreditipuuvõime influences a borrower’s credit utilisation ratio, which is a key metric that lenders monitor. Lower utilisation—using a fraction of the available limit—generally strengthens credit scores. It also acts as a protective measure; the limit prevents a borrower from spending beyond their means, thereby reducing default probability.

In Estonia and other EU jurisdictions, banks are required to disclose the all terms and conditions surrounding krediidipuuvõime clearly to consumers, including how the limit may change, the legal basis for such changes and the implications for the interested party. Regulatory bodies oversee that credit limits are issued responsibly and transparently, ensuring that borrowers are not exposed to unwarranted financial risk.