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Show credit worthiness (raising credit card limit) while not working
Old 12-01-2018, 11:50 AM   #1
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Show credit worthiness (raising credit card limit) while not working

We had a bunch of expenditures hit all in the same billing period (new iPads, new washer and dryer, all our holiday shopping, a trip, etc.) so our normal credit card spending actually quadrupled. I logged in on Friday and noticed we'd gone over our limit.

I figured no problem, we have been using the same credit card for 6 years, paying it off each month. I'll just ask for a credit line increase. It was denied! I don't know if it is because of a lack of salary or what as the letter won't come for up to 10 business days, but it raises a question:

How do you show creditworthiness? My credit rating is in the 800s but no way to show a salary. The questions the form asked, such as debt and house payment (both none) should have been an indicator to them. But I guess they want an income from an employer?

Not a big deal, I just went ahead and paid the last billing cycle's balance 2 days ahead of the due date and we are back under. I suppose we don't really need a line increase as this is the first time in 6 years we have even come close. But it did make me wonder.
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Old 12-01-2018, 12:01 PM   #2
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I am no expert when it comes to credit cards because I hate debt. I only have one credit card, my Amazon Visa card, which I got in 2014. I pay it off in full every month automatically. I may hate debt, but I do like the rewards and that is why I have it.

Anyway, they occasionally ask me what my income is (via pop-up when I log in). Usually I ignore it, but once I told them what my AGI was when I did my taxes. Then they raised my limit. I was very open about being retired.
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Old 12-01-2018, 12:03 PM   #3
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I use income on tax return as a substitute for wages as both are income.
Surely you have dividends, LTCG, IRA to Roth conversions, pension, SS, or at least some of them.

Hopefully you also have more than 1 credit card, both with good benefits that you can spread the costs over during heavy usage months.
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Old 12-01-2018, 12:15 PM   #4
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Hopefully you also have more than 1 credit card, both with good benefits that you can spread the costs over during heavy usage months.
We use two. One gives us better points on gas and groceries, the other (and the one referenced above) we use for everything else as it gives better rewards on everything but gas and groceries. Had I realized how close the one was, switching to the other would have made sense. Or sending in an early payment.

I did list our adjusted income for taxes...I guess it just wasn't enough. Oh well.

Although I just thought, if they ran a credit report it may not have come back for them as I put a freeze on our credit reports earlier this year (concerned about fraud/identity theft because of the FUD in the news, lol).
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Old 12-01-2018, 12:19 PM   #5
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A few years ago I asked for a credit line increase on my main credit card. I had to thaw the credit agency's credit report but the rep approved my requested increase right away, without having to show any proof of income, wages or otherwise.
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Old 12-01-2018, 12:25 PM   #6
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To me it sounds like Sunny may have had only the single credit card. While his/her score may have been in the 800's historically since he/she ran up their credit utilization (to >100%) it may have tanked their score when the credit line increase was being evaluated. They may have never seen the drop since they went in and paid off the balance before the next statement was cut. In any case they should get a letter with the top three reasons they were denied their credit line increase. This may be a lesson to not have just a single credit card, and to make certain you have double/triple/quadruple/or even more the credit lines that you might ever need - BEFORE you need them.

EDIT: Has anyone ever been asked for income verification for just a credit card (can understand mortgages would ask)? I've been asked my income, but I've never had to provide proof or permission for verification.
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Old 12-01-2018, 12:26 PM   #7
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I answer with AGI plus dividends on a 7 figure tIRA & Roth. I am careful about the percentage of credit I am utilizing. We have a $20k trip to pay off at about $4k a month, so just for grins I asked for a credit increase, the card company automatically added $3k to my limit, but I asked for more. After a hard pull on my credit report I got a $12k increase.
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Old 12-01-2018, 12:33 PM   #8
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How do you show creditworthiness? My credit rating is in the 800s but no way to show a salary. The questions the form asked, such as debt and house payment (both none) should have been an indicator to them. But I guess they want an income from an employer?

Not a big deal, I just went ahead and paid the last billing cycle's balance 2 days ahead of the due date and we are back under. I suppose we don't really need a line increase as this is the first time in 6 years we have even come close. But it did make me wonder.
Well it was in the 800's .

I've not come close to exceeding my limit as I can spread it on several cards (yes I pay it off before the due date)

Some cards provide a FICO score and the 800+ dropped to about 770 when I used more credit that I normally do, but significantly below 50% (IIRC below 25%) It has been a while. One of the bigger charges was several months of health insurance. One CC company pushes deals to get more cash back if you spend above a certain amount.

The credit card companies like to get info on your income, but it doesn't have to be earned as far as I know. (I did ask). I use my income from the most recent tax year. It was one of the choices they gave as an option.
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Old 12-01-2018, 03:29 PM   #9
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How do you show creditworthiness?
Ours is in the 800s too but we do have pension, SS, and dividend income. No one has ever asked for proof of it though. The only payments we make are the routine credit cards that we pay off every month, about four or five of those. No mortgage or car payments. I think even utilities like water & sewer, natural gas, telephone (we still have a land line) also report to credit bureaus so I suppose that helps.
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Old 12-01-2018, 03:45 PM   #10
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I paid off the last few thousand on the HELOC in October. That subaccount is closed, although the HELOC is still open. My score dropped 20 points once the zero balance and closure made its' way through the reporting system. No recent revolving credit history. Guess I will have to be more careful about leaving a small balance on a couple of credit cards when they close out for the month.

I never report taxable income to a credit card company. With all the depreciation, it's not relevant. I try to give a realistic estimate of the actual net household income. If they ask for taxable income specifically, I ignore the question.
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Old 12-01-2018, 04:25 PM   #11
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I loaded up on credit authorization and a HELOC before I retired. I hope I never have to use it but it’s there if I do need it. My main objective was in case I needed to manage my taxable income.
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Old 12-01-2018, 04:31 PM   #12
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Early in the year I usually use last year's AGI and late in the year I use what it is expected to be for the rest of the year.

I would not want to use AGI for next year. Our IRA withdrawals next year are low enough that we probably won't have enough income to make our SS income taxable. I would probably just use either this years AGI (if early in the year) so use the SS income (whether taxable or not) if later in the year. In future years we will have larger withdrawals though.
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Old 12-01-2018, 04:41 PM   #13
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I don't know if this will work, but why don't you try asking for credit increase when the balance on all your credit cards is close to zero? I always paid full each month but after I moved to Canada, my FICO score in the US went up by about 20 points, and I attribute it to the fact that I hardly use my US credit cards anymore, and the balance is always very close to zero.

Another problem might have been that you requested an increase after you went over your line of credit. Maybe that raised some kind of flag.
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Old 12-01-2018, 05:05 PM   #14
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I don't know if this will work, but why don't you try asking for credit increase when the balance on all your credit cards is close to zero? I always paid full each month but after I moved to Canada, my FICO score in the US went up by about 20 points, and I attribute it to the fact that I hardly use my US credit cards anymore, and the balance is always very close to zero.

Another problem might have been that you requested an increase after you went over your line of credit. Maybe that raised some kind of flag.
Remember when around 2009, people that had their cards 70% maxed and carried a balance, suddenly had the credit limit dropped so they ended up at over 100% utilization.

CC companies did it, as they wanted to reduce their risk.
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Old 12-03-2018, 12:13 AM   #15
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Unfortunately, you may find in the 12 pages of fine print in your credit agreement , exceeding the credit limit is usually considered to be in default. That is a show stopper with that bank. It may lower your credit score a little for 6 mo or a year.

No big deal IMO.

Just get a card or 2 from other banks. I get pre approved card offer a couple of times a mo., and currently have no wage income.

4 - 5 Visa, M/C , Discover, AMEX cards will boost your overall credit line. And add a couple of store cards too.
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Old 12-03-2018, 01:23 AM   #16
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Generally you can indicate you are retired, the amount of passive income you get annually and the size of your nest egg. They generally have a selection on the screen which provides for alternative income sources. Regardless of what the letter says, if you want the increase, just call them, speak with a representative and explain - they will give you the increase.

Sometimes the old-fashioned way of working with a bank or credit card company still works best.

Quote:
Although I just thought, if they ran a credit report it may not have come back for them as I put a freeze on our credit reports earlier this year (concerned about fraud/identity theft because of the FUD in the news, lol).
That is a possibility as well.
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Old 12-03-2018, 02:26 AM   #17
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Earlier this year, I had one credit card closed due to non-use. I don’t know if they notified me or not. I also got a message on another card that it would be closed for the same reason, so I made a charge on it to keep it active. I guess I’ll have do do the same with my other non-used cards. The reason for all the cards? To keep our utilization low. We charge just about everything and pay it off every month. Sometimes, utilization is >50% on the cards we use. However, total credit utilization never exceeds 10%.
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Old 12-03-2018, 11:20 AM   #18
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Earlier this year, I had one credit card closed due to non-use. I donít know if they notified me or not. I also got a message on another card that it would be closed for the same reason, so I made a charge on it to keep it active. I guess Iíll have do do the same with my other non-used cards. The reason for all the cards? To keep our utilization low. We charge just about everything and pay it off every month. Sometimes, utilization is >50% on the cards we use. However, total credit utilization never exceeds 10%.
A few years ago, I changed my main credit card to one which offers cash back, and it is through my main bank so I can just go on line and pay the bill from home with a few mouse clicks. My previous main card became relegated to back-up status, but I wanted a auto-pilot way to keep the card open without having to carry it around with me or forgo much of my main card's cash-back benefit. I kept on that old card a small, annual fee for a minor service. It gets posted once a year and keeps the card active. With a high limit, it is probably good for my credit score, too.

I have had a few other cards closed for extended nonuse over the years, too. Most of those happened back in 2009-2010 when banks were cutting back on credit. I hadn't used those in at least 10 years so it was no big deal.
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Old 12-03-2018, 12:40 PM   #19
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Earlier this year, I had one credit card closed due to non-use. I donít know if they notified me or not. I also got a message on another card that it would be closed for the same reason, so I made a charge on it to keep it active. I guess Iíll have do do the same with my other non-used cards. The reason for all the cards? To keep our utilization low. We charge just about everything and pay it off every month. Sometimes, utilization is >50% on the cards we use. However, total credit utilization never exceeds 10%.
Some folks just set a yearly reminder to have a single charge to keep the cards current.
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