Credit card issuers determine credit limits through internal risk assessments, considering credit reports, repayment history, income, current debt, and spending patterns. Consistent on-time payments and low credit utilization are key factors. Banks evaluate affordability and the likelihood of continued timely payments, even during financial difficulties. A higher credit limit can potentially improve a credit score by lowering the credit utilization ratio, provided spending remains consistent. In India, scores above 700 are generally considered good.