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Do Increased Credit Card Limits affect Credit Score?
Old 11-14-2012, 03:17 PM   #1
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Do Increased Credit Card Limits affect Credit Score?

One of our credit card's limit was increased today to $28,000, and I'm wondering if the increased limit (which equals Presumed Debt) will affect our FICO Credit Score. We surely do not need a $28K limit, and I want to lower it.

At some point, I would imagine too much "Presumed Debt" will affect our FICO Score?

All our bills are current, and we pay off the credit card balances every month.

Would greatly appreciate some insight on this. Thank you!
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Old 11-14-2012, 03:21 PM   #2
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The lower the percentage of your credit limit you use, the higher your score. Don't lower your limit.
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Old 11-14-2012, 04:11 PM   #3
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Quote:
Originally Posted by brewer12345 View Post
The lower the percentage of your credit limit you use, the higher your score. Don't lower your limit.
+1

Provided that you have the discipline to not increase your spending in line with the increased limit then I would do nothing.
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Old 11-14-2012, 04:13 PM   #4
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As Brewer said... do not lower your limit....


Since both my sister and I are refinancing our mortgage, we both got our official credit score... hers was a lot higher than mine...

She is retired and lives on a pension and SS... I make almost twice that amount... I have 8 times the assets she has... I pay all my bills on time... so why is hers so much higher Her ratio of credit to credit limit!!! When her DH was alive, he played the float game with CCs and had over $150K of CC debt outstanding at one point in time.... it took awhile, but she has paid them all off... so, her thousand or so of CC debt divided by her $150K of limit is a lot better than my $3K of credit divided by my $50ish limit...


Sure, stupid way to figure things.... because if she ever were to get those CC amounts to the limit, she could not pay them off.... me, I could...
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Old 11-14-2012, 05:05 PM   #5
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Yes, keep the higher limit even if you think you don't have credit card debt. I mean I think of myself as someone without credit card debt as DH and I pay our credit card debts in full every month.

However, to the mortgage company we recently applied to we do have credit card debt since the amount that Amex reports every month is considered "debt" since, after all, I might not pay it every month and might just pay the minimum.

So, let's say you charge $2000 a month and have a $15000 limit and you pay the bill every month. That is more than 10% of your limit. On the other hand, if you charge $2000 a month and have a $25000 limit that is less than 10% so doesn't ding your credit score that much.

Even increasing limits on credit cards that you don't regularly charge on is helpful as the credit score looks at what percentage utilization you have on the specific card and on your overall utilization of credit.

For most people getting higher limits will help their credit score not hurt them.
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Old 11-14-2012, 05:19 PM   #6
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Check out CreditKarma.com. It is safe to use, and they won't flood your inbox with email.
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Old 11-15-2012, 05:36 PM   #7
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Originally Posted by Texas Proud View Post
As Brewer said... do not lower your limit....


Since both my sister and I are refinancing our mortgage, we both got our official credit score... hers was a lot higher than mine...

She is retired and lives on a pension and SS... I make almost twice that amount... I have 8 times the assets she has... I pay all my bills on time... so why is hers so much higher Her ratio of credit to credit limit!!! When her DH was alive, he played the float game with CCs and had over $150K of CC debt outstanding at one point in time.... it took awhile, but she has paid them all off... so, her thousand or so of CC debt divided by her $150K of limit is a lot better than my $3K of credit divided by my $50ish limit...


Sure, stupid way to figure things.... because if she ever were to get those CC amounts to the limit, she could not pay them off.... me, I could...
Exactly. You can have a bum with no job, and a $500 credit limit CC with zero balance, and his score will be higher than some celebrity with millions in income, but who doesn't pay their bills.

The other thing is that FICO only knows the past. Not the present nor future. Some people game this to their favor, when they know financial doom lies around the corner. It's a primary reason CC banks get stiffed so often. They have no timely financial information on their card holders, until it's too late.
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