At some point, the credit card company will probably increase your limit to $2000, at which point your score will again go up.

Or not, because your credit utilization % would decrease. (Edit: Actually I guess maybe two things are happening: an increase to the general score for having more available credit, but also a (likely smaller) decrease to the score for now having a lower utilization %).

I've literally had this happen to me. It wasn't a large decrease, maybe something like 8-10 points, but it definitely happened.

I'm sure the algorithms that these agencies uses are much more complex than what we can get into here, so I'm sure the exact end results can vary wildly from person to person.

However, I can tell you from personal experience, that my score went down slightly after the bank increased my credit limit on one of my cards. This was years ago, maybe they tweaked things, I dunno...

edit:

re-read the other part of your comment:

In your example, if you close that card, your score is likely to go down, as the total credit available to you goes down

I think this is true as well... If i recall, it didn't seem to be a "total credit utilization" as in, add up all availabale credit from all sources (including student loans, etc.), and use that as the denominator so to speak, that was what hurt my score. But more like on a per-card/account basis. If that makes sense at all lol.

Like "credit cards" is just one of many sections that factor into the total score. You could be doing great with your student loans, car loans, mortgage, etc. and that will give you a good score.

But then if credit card aspect (module?) only has 1 card open with a $5,000 limit, and you keep the balance at $0-$200 or whatever, then that's going to negatively affect the overall score.

Man I hope that made sense at all, I'm a bit stoned at the moment lol. Made sense to me haha... I think I remember creditkarma explaining this to me years ago when my credit was in the shitter. I do know that paying attention to credit card utilization % did quite a bit to help me get my credit back up.