Sully Posted April 5, 2011 Report Share Posted April 5, 2011 I know we have some financial experts on the board and would like to hear some opinions on this matter. I have a card that has a credit limit of like $32,000. My balance is never above $5,000. The only reason it would even go that high would be from traveling for work and then work reimburses me. I've never asked for my limit to be raised, they just raise it automatically. Would it hurt or help my credit score if I had the limit decreased to say $10,000? Or would it do nothing to my credit score if I had it lowered? Should I even bother with it? Quote Link to comment Share on other sites More sharing options...
RedRocket1647545505 Posted April 5, 2011 Report Share Posted April 5, 2011 I'm no expert, but I think it would hurt your credit score to have it lowered. At this point, you're using 15.625% of your available credit. If you had it lowered to $10,000, you'd be using 50% of your available credit. I think one of the big things that helps your credit score is not using anywhere near your available credit, so obviously, having a lower debt:credit ratio is better. I could be wrong. Quote Link to comment Share on other sites More sharing options...
iwashmycar Posted April 5, 2011 Report Share Posted April 5, 2011 i dont think its "of available credit" but its how much credit your using of your income. Id still probably let it be Quote Link to comment Share on other sites More sharing options...
LJ Posted April 5, 2011 Report Share Posted April 5, 2011 You can get dinged for too much available credit Quote Link to comment Share on other sites More sharing options...
greg1647545532 Posted April 5, 2011 Report Share Posted April 5, 2011 I went from having a combined total of around $3000 in credit limits to a combined total of over $30,000 in a period of a few months thanks to some creative negotiating, and my credit score shot up over 100 points. YMMV, but I'd leave it be. eta: According to the advice I get from myfico.com, Austin is right. One of the key indicators is % of available credit used. Quote Link to comment Share on other sites More sharing options...
AWW$HEEET Posted April 5, 2011 Report Share Posted April 5, 2011 you can get dinged also for lowering. it shows that you dont consider yourself to be trustworthy. aka you think you are a little bitch. not very confident eh? Quote Link to comment Share on other sites More sharing options...
Furloaf Posted April 5, 2011 Report Share Posted April 5, 2011 Lowering won't actually affect your score, but underwriters viewing it may base a decision, wondering about the reason it was lowered. On the other hand, having a high limit may also make them think that you already have sufficiently available credit and can deny an application based on that. As far as score wise goes, a higher limit is best as your utilization at any time is relatively lower. Utilization scales non-linearly with the decrease in score (40% utilization may drop your score 50 points, but 80% utilization is more like 150-200 points). You should keep the limit as high as possible. If you ever get denied for "having sufficiently available credit", then just write an appeal letter explaining they increased it automatically, you don't plan on using it, etc. Quote Link to comment Share on other sites More sharing options...
Otis Nice Posted April 5, 2011 Report Share Posted April 5, 2011 Things that are highly considered when I run a loan app for a customer is their LTV and DTI. If you're not doing any major purchasing/financing soon it won't matter. With a CCD though only outstanding balances effect your numbers so if it's always $5K or less that's all that is considered at the time of application. Quote Link to comment Share on other sites More sharing options...
Sully Posted April 5, 2011 Author Report Share Posted April 5, 2011 I just refi'd my house and my credit scores are right at 800. So, I guess I should just let this card be and keep using it as I have been. Quote Link to comment Share on other sites More sharing options...
jerrodh Posted April 5, 2011 Report Share Posted April 5, 2011 I'm no expert, but I think it would hurt your credit score to have it lowered. At this point, you're using 15.625% of your available credit. If you had it lowered to $10,000, you'd be using 50% of your available credit. I think one of the big things that helps your credit score is not using anywhere near your available credit, so obviously, having a lower debt:credit ratio is better.b I could be wrong. This you want to stay below a certain percent to be not considered high risk. Everything I've heard including from finance classes support this. As for having to much credit I cannot comment on that, but 32k worth of credit isn't a ton. I mean I've known 20 year olds with 20k+ in credit debt. So I would think 12k more for a smart credit worthy person like you seem to be would not br hurting you. Quote Link to comment Share on other sites More sharing options...
Aaron Posted April 5, 2011 Report Share Posted April 5, 2011 What about the opposite? We have a 3k limit and put purchases on it for points. Sometimes we cary it for a month. Can asking for a limit to be raised be bad? Good credit almost no revolving debt. Quote Link to comment Share on other sites More sharing options...
KillJoy Posted April 5, 2011 Report Share Posted April 5, 2011 "Lose" you card. KillJoy Quote Link to comment Share on other sites More sharing options...
nurkvinny Posted April 5, 2011 Report Share Posted April 5, 2011 The total of all your trade lines balances and limits are used to figure your ratio. Leave it at 32k. Quote Link to comment Share on other sites More sharing options...
Bam Posted April 5, 2011 Report Share Posted April 5, 2011 I've often wondered this for a moment or two, seeing as how I could charge roughly half my house on my available CC's, but after reviewing my excellent credit and score, I've forgot about it just as fast. IMO you can't have too much AVAILABLE credit, especially since I regularly put $3-4k/month on my card for everyday stuff, and the cash rewards. It's always paid at the end of the month, but imagine if I only had $10k available, it'd appear as I'm always utilizing 40% of my available, which isn't good. Quote Link to comment Share on other sites More sharing options...
Furloaf Posted April 6, 2011 Report Share Posted April 6, 2011 Summary of Credit cards and credit score: + Limit = good - Limit = bad (if you carry a balance) Closing = bad (lose history) >0%-9% Utilization is best (flat 0% utilization actually hurts) >10% bad and gets much worse as it goes up Quote Link to comment Share on other sites More sharing options...
John Bruh Posted April 6, 2011 Report Share Posted April 6, 2011 You can get dinged for too much available credit I'm calling BS. I've never ever heard that and deal with 10 banks daily. That just sounds stupid. Lowering won't actually affect your score. Lowering it will affect your score. Because if you are carrying a $5,000 balance and drop the limit to $10,000 now you've got the card 1/2 way maxed out. Now if you have an 800 and prefect history will this really effect you....NO. But if someone was in the low 700s or 600s yes this will change things for you. And getting a loan the under writers will defintly look at it negativly. Quote Link to comment Share on other sites More sharing options...
oh8sti Posted April 6, 2011 Report Share Posted April 6, 2011 As far as I know I don't have a limit. Quote Link to comment Share on other sites More sharing options...
John Bruh Posted April 6, 2011 Report Share Posted April 6, 2011 axex=no limit I found that out one month.....to much blow and hookers...open bill.... OHHH SHITTT lol Quote Link to comment Share on other sites More sharing options...
Furloaf Posted April 6, 2011 Report Share Posted April 6, 2011 I'm calling BS. I've never ever heard that and deal with 10 banks daily. That just sounds stupid. Lowering it will affect your score. Because if you are carrying a $5,000 balance and drop the limit to $10,000 now you've got the card 1/2 way maxed out. Now if you have an 800 and prefect history will this really effect you....NO. But if someone was in the low 700s or 600s yes this will change things for you. And getting a loan the under writers will defintly look at it negativly. Just the act of lowering the limit will not affect the score. If utilization % goes up because of a higher debt/credit ratio, then the score will drop, but that is an indirect symptom of the limit being lowered. Going from $20k limit to $5k, while having 0% utilization - will not affect a change in the credit score. For the first point: I got denied by PenFed for having "sufficient available credit to income level." Quote Link to comment Share on other sites More sharing options...
LJ Posted April 6, 2011 Report Share Posted April 6, 2011 I'm calling BS. I've never ever heard that and deal with 10 banks daily. That just sounds stupid. Most people who have enough credit to be denied for having too much credit won't need a car loan, or most people are still under being maxed out and are not willing to take on another loan, hence not hearing about it. Basically there is only so much credit you can get for your income level. Just to make it easy, lets say your limit is 200k. You have a 150k mortgage, a 25k car loan and 25k available on your credit cards. If you apply for new credit, even while having a lets say 790, you will get denied. Quote Link to comment Share on other sites More sharing options...
downingracing Posted April 6, 2011 Report Share Posted April 6, 2011 ...For the first point: I got denied by PenFed for having "sufficient available credit to income level." That is the nice way of saying "Too much available credit based on income"... Loan qualification can be based on the amount of already approved credit you have access to. If you make $60k/yr and have 3 credit cards (even with 0 bal) with limits of $10k each, you have the ability to charge $30k at the drop of a hat. Even with a 0 balance, there sometimes a formula used to calcualte available credit. Quote Link to comment Share on other sites More sharing options...
Aaron Posted April 6, 2011 Report Share Posted April 6, 2011 What about the opposite? We have a 3k limit and put purchases on it for points. Sometimes we cary it for a month. Can asking for a limit to be raised be bad? Good credit almost no revolving debt. Any help? Quote Link to comment Share on other sites More sharing options...
Bam Posted April 6, 2011 Report Share Posted April 6, 2011 Any help? I don't believe requesting a limit increase periodically can harm you. And depending on how much of your 3000 limit your using everymonth it could really help. I typically request a limit increase on the cc website once or twice a year. Don't really need to anymore as all my cards that started as 1000, 2500, etc limits are well north of 10k each now that I've had them a few years and requested increases every so often. Quote Link to comment Share on other sites More sharing options...
Furloaf Posted April 6, 2011 Report Share Posted April 6, 2011 Limit increase requests may initiate a hard credit pull, which will ding your credit score for a year. Though likely not as much as the current utilization is dropping that score, so it is still a good idea to request. Quote Link to comment Share on other sites More sharing options...
CRAWDAD Posted April 7, 2011 Report Share Posted April 7, 2011 Just lie about your income! Credit card companies don't check it! However, Car/home loans might ask for proof of income! You will have to provide them with pay stubs or w-2's or tax return papers! Your place of work is not allowed to provide that info unless you authorize it. Quote Link to comment Share on other sites More sharing options...
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