Does having a higher credit limit make you look better?

[nitsuj3580]

I have one credit card for about 2 years now that has had a $1000 credit limit. I have never needed more than that. I just use it to pay bills and to buy the occasional Hot Deal. I always pay it off in full at the end of each month. I've been told that I should increase my credit limit regardless because it will look good for me in a credit report or when I go to get a car, house, etc. Is this true? Don't know too much about how credit reports work so any info would be appreciated. Thanks!

 

[conjur]

From what I've read from various boards and books (For starters:

http://consumers.creditnet.com/straighttalk/board/forumdisplay.php?s=&forumid=3
http://moneycentral.msn.com/community/message/board.asp?board=YourMoney )

is that you should have 3 lines of credit, not just one big line of credit. And, keep the balances at or near $0 and pay your bills ON TIME! 🙂

You don't want to have extremely large credit limits and esp. do not want to keep high balances as that lowers your debt/income ratio, not to mention the fact you're forking over more and more of your hard-earned money for interest going right to the credit companies' pockets.

 

[HappyPuppy]

Originally posted by: conjur
From what I've read from various boards and books (For starters:

http://consumers.creditnet.com/straighttalk/board/forumdisplay.php?s=&forumid=3
http://moneycentral.msn.com/community/message/board.asp?board=YourMoney )

is that you should have 3 lines of credit, not just one big line of credit. And, keep the balances at or near $0 and pay your bills ON TIME! 🙂

You don't want to have extremely large credit limits and esp. do not want to keep high balances as that lowers your debt/income ratio, not to mention the fact you're forking over more and more of your hard-earned money for interest going right to the credit companies' pockets.

A higher credit limit will do exactly the opposite of what you are thinking.

 

[conjur]

Also, check out http://www.myfico.com