Good time to increase credit limits?

[njdevilsfan87]

Two days ago, my credit was pulled up as 780 at a car dealer. I financed a car, and got a good low rate on a 60 month payment plan. Today, I saw a notification online that my credit card is eligible for a limit increase. I don't need any increases, but then I figured I should do it anyway, since my car financing is done, and I can afford to take a credit score hit now. And because of that, I was thinking of doing the following :

1) Credit limit increase both cards
2) Get a third credit card

Is there any reason at all, not to do this? Should I wait a certain period of time in between doing each, or can I just do it all in go?

 

[SSSnail]

Oh yeah, definitely, get more in debt.

'Muricah, fuck yeah!

 

[OCGuy]

1. Increasing limits can only help you, not hurt you. It is always a good idea. That way if you ever have a balance on the card, it will be a lesser % of the limit, keeping your revolving credit utilization ratio down.

2. Opening a new card will temporarily ding you for the inquiry (no biggie) and having the average age of your revolving trade-lines drop. If you put a balance on it in the first few months, it will hurt more than doing that on an established card.

3. Nobody has a credit score. A car dealer paid one of the three bureaus, who have multiple scoring options, to analyze your credit report data and give them a number that represents risk. Each bureau may score you differently at any one time even if they had the same information, which is rare because some credit tradelines only report to one or two of the bureaus. Collections are notorious for this. Also they market different scoring models to auto dealers, so it could be a different range of scores, and it could weigh different things more or less than the standard Beacon and Fair Issac II that we use for mortgages.

4. It sounds like you have stellar credit, so neither an inquiry or a new card will hurt your risk profile enough to hurt you interest rate wise (at least with whatever bureau the dealer pulled). Congrats on being responsible, don't be ashamed of it (despite what the messages after me say). Credit is a great tool and if you know the game it can potentially save you a ton of money.

Multiple hard inquiries might hurt your score a bit, it.

When existing creditors review your account for limit increases, it is generally a soft-pull.

 

[deadlyapp]

Multiple hard inquiries might hurt your score a bit, but you can likely recover from it. Giving yourself more allowable debt may not help you too much, but if you have some existing credit card utilization, then it may on the whole help.

If you already have a decent amount of open credit, it's probably not worth it.

 

[RockinZ28]

Open a new card, one that gives you some money.

Just opened 2 chase southwest cards that will give me $832 in Amazon gift cards after the annual fees, or a bunch of free flights. And a companion pass through 2014.

 

[njdevilsfan87]

Oh yeah, definitely, get more in debt.

'Muricah, fuck yeah!

But I'm actually not in debt.

 

[SSSnail]

But I'm actually not in debt.

Exhibit A:

...I financed a car...

 

[njdevilsfan87]

Maybe I should have paid it off with my debit card, instead of keeping the rest of the balance as a value asset that I could be use to make some 5-10X of what the financing costs me.

Edit : But I wouldn't have been able to. I'm pretty sure my debit card went inactive some 5 years ago. So good thing I didn't even try!

 

[Schfifty Five]

I don't think those auto credit limit increases count as hard pulls, so no dings to your credit score.

But I mean, as long as you are a responsible person with your money, then having more debt available via credit card limit should help your score in the long run.....right?

Something like your utilization rate will be smaller if your spending habits remain the same, but you have higher credit capacity.

 

[T9D]

Don't get another card. You don't need it. I'd up the other credit line though.

 

[boomhower]

I say yes to both. Larger limits only help you in a couple of ways already listed. In the long term a third card is also beneficial. You sound financially responsible so go ahead. I'd get a good rewards card. The Sallie Mae Visa gives 5% back on gas, at Amazon, and Walmart.

 

[Broheim]

I say yes to both. Larger limits only help you in a couple of ways already listed. In the long term a third card is also beneficial. You sound financially responsible so go ahead. I'd get a good rewards card. The Sallie Mae Visa gives 5% back on gas, at Amazon, and Walmart.

somebody give this man a cookie for using an Oxford comma!

 

[fstime]

1. Increasing limits can only help you, not hurt you.

I dont know about that.

If I have, lets say, 100K (or any arbitrarily high number) combined credit limits on all cards and I apply for a hefty mortgage, the underwriter is going to take into consideration that I also have access to a substantial amount of credit through credit cards that I might be able to handle if you take the new loan into consideration.

I always saw extremely high credit limits as bragging rights. No real purpose for your typical person.

 

[Tweak155]

Maybe I should have paid it off with my debit card, instead of keeping the rest of the balance as a value asset that I could be use to make some 5-10X of what the financing costs me.

Edit : But I wouldn't have been able to. I'm pretty sure my debit card went inactive some 5 years ago. So good thing I didn't even try!

You don't have to pay it off, but to stay you're not in debt is a red flag (not to mention completely false).

I have a 0% interest rate credit card with (now) a small balance. I'm still in debt even though it is 0%.

I explain that, outside of my mortgage, the debts I have are ones I want to keep. I have a 0% credit card and a 1.84% auto loan. Even my mortgage is only 2.75%, I doubt I'd pay that completely off if I had the chance. But I do have a paranoid personality when it comes to paying money for nothing.

 

[silverpig]

1. Increasing limits can only help you, not hurt you. It is always a good idea. That way if you ever have a balance on the card, it will be a lesser % of the limit, keeping your revolving credit utilization ratio down.

2. Opening a new card will temporarily ding you for the inquiry (no biggie) and having the average age of your revolving trade-lines drop. If you put a balance on it in the first few months, it will hurt more than doing that on an established card.

3. Nobody has a credit score. A car dealer paid one of the three bureaus, who have multiple scoring options, to analyze your credit report data and give them a number that represents risk. Each bureau may score you differently at any one time even if they had the same information, which is rare because some credit tradelines only report to one or two of the bureaus. Collections are notorious for this. Also they market different scoring models to auto dealers, so it could be a different range of scores, and it could weigh different things more or less than the standard Beacon and Fair Issac II that we use for mortgages.

4. It sounds like you have stellar credit, so neither an inquiry or a new card will hurt your risk profile enough to hurt you interest rate wise (at least with whatever bureau the dealer pulled). Congrats on being responsible, don't be ashamed of it (despite what the messages after me say). Credit is a great tool and if you know the game it can potentially save you a ton of money.



When existing creditors review your account for limit increases, it is generally a soft-pull.

Pretty much this.

When creditors give you the offer themselves, it's because they pull all credit data on all of their customers regularly (monthly, quarterly), so they can do analytics on it and know who to market new cards to etc. Because of this, your credit actually gets pulled about 50 times per year, depending on how many accounts you have and how often they pull customer data. These pulls don't affect your credit score in any way.

Going and asking for credit will put a small temporary ding in your score, but with a 780, it won't affect much, and it won't take long to bounce back up.

OP: If you care about 5 points on your score, then just take the free increase. If not, or if there is a particular card you want, you can get it and it won't make much difference at all.

 

[smitbret]

Pretty much this.

When creditors give you the offer themselves, it's because they pull all credit data on all of their customers regularly (monthly, quarterly), so they can do analytics on it and know who to market new cards to etc. Because of this, your credit actually gets pulled about 50 times per year, depending on how many accounts you have and how often they pull customer data. These pulls don't affect your credit score in any way.

Going and asking for credit will put a small temporary ding in your score, but with a 780, it won't affect much, and it won't take long to bounce back up.

OP: If you care about 5 points on your score, then just take the free increase. If not, or if there is a particular card you want, you can get it and it won't make much difference at all.

This is the best information in this thread.

Follow his lead.

 

[SlitheryDee]

There's no reason not to do it. It'll help your credit score in the long run.

 

[Josh123]

I just applied for the Capital One Quicksilver card. We've been using a Best Buy credit card which would give us Best Buy coupons as a reward. I don't know why we are just now switching over but earning 1.5% cash back on everything will be a lot better.

Plus the 0% interest on balance transfers will help us save some money.

 

[Schfifty Five]

somebody give this man a cookie for using an Oxford comma!

I hate when people DON'T use an oxford comma.

 

[OCGuy]

I dont know about that.

If I have, lets say, 100K (or any arbitrarily high number) combined credit limits on all cards and I apply for a hefty mortgage, the underwriter is going to take into consideration that I also have access to a substantial amount of credit through credit cards that I might be able to handle if you take the new loan into consideration.

I always saw extremely high credit limits as bragging rights. No real purpose for your typical person.

No, they wont. Trust me. Available credit is not counted, unless it is calculating the CLTV/TLTV on an existing HELOC that is still available to draw from.

 

[Imported]

Open a new card, one that gives you some money.

Just opened 2 chase southwest cards that will give me $832 in Amazon gift cards after the annual fees, or a bunch of free flights. And a companion pass through 2014.

Woah. Gotta sign up for that card!

 

[boomhower]

No, they wont. Trust me. Available credit is not counted, unless it is calculating the CLTV/TLTV on an existing HELOC that is still available to draw from.

This. I've never seen a mortgage denied because of to much available credit. Even if they did, you would just go somewhere else as you credit is almost perfect.