Should I contiune to increase my CC credit line?

[spacejamz]

Thread about the MSN article about the 2008 FICO score changes...

Text

 

[SoulAssassin]

Let it continue to grow, better yet, call all of your credit card companies in one day and request to have your lines increased to the maximum they will do. I have over 1/4 million in available credit and it isn't hurting my score at all.

 

[Xavier434]

Originally posted by: spacejamz

Thread about the MSN article about the 2008 FICO score changes...

Text

Nice

 

[Gooberlx2]

Originally posted by: SoulAssassin
Let it continue to grow, better yet, call all of your credit card companies in one day and request to have your lines increased to the maximum they will do. I have over 1/4 million in available credit and it isn't hurting my score at all.

But when you go for a loan, credit score isn't the only thing a lender looks at.

 

[Xavier434]

Originally posted by: Gooberlx2

Originally posted by: SoulAssassin
Let it continue to grow, better yet, call all of your credit card companies in one day and request to have your lines increased to the maximum they will do. I have over 1/4 million in available credit and it isn't hurting my score at all.

But when you go for a loan, credit score isn't the only thing a lender looks at.

That's right. All that matters in the end is what the lenders decide based on your credit history which includes much more than your FICO score. Having that much available credit without the income to back it up places you in the category of being much higher risk despite your FICO score....unless you happen to pull in over a million per year in your case. I am not saying that you will never get a loan, but I am saying that you will not get the best loans with the best interest rates. Depending on the lender, there will also be cases where you will be flat out denied just for this reason.

 

[SoulAssassin]

Originally posted by: Gooberlx2

Originally posted by: SoulAssassin
Let it continue to grow, better yet, call all of your credit card companies in one day and request to have your lines increased to the maximum they will do. I have over 1/4 million in available credit and it isn't hurting my score at all.

But when you go for a loan, credit score isn't the only thing a lender looks at.

No doubt. The only time it really becomes an issue is when you have a lender that views it as a risk. My high FICO, minimal debt and high income (I swear this isn't a typical ATOT I make 200 billion a year post) generally doesn't translate into risk when combined with the high lines. The only time I might see an issue is when I go to sell my house and get another mortgage. If they are worried about it I can close the accounts, get a letter from them stating the account is closed and reopen it the day after I settle. Some creditors will pull a report when re-opening and re-evaluate the line, etc but most will just reopen it if it's done w/in 6 months of when it closed.

Botton line, if/when I'm denied for a loan because of it, there are easy steps to take to get around the denial. I sleep fine at night.

 

[Xavier434]

Originally posted by: SoulAssassin

Originally posted by: Gooberlx2

Originally posted by: SoulAssassin
Let it continue to grow, better yet, call all of your credit card companies in one day and request to have your lines increased to the maximum they will do. I have over 1/4 million in available credit and it isn't hurting my score at all.

But when you go for a loan, credit score isn't the only thing a lender looks at.

No doubt. The only time it really becomes an issue is when you have a lender that views it as a risk. My high FICO, minimal debt and high income (I swear this isn't a typical ATOT I make 200 billion a year post) generally doesn't translate into risk when combined with the high lines. The only time I might see an issue is when I go to sell my house and get another mortgage. If they are worried about it I can close the accounts, get a letter from them stating the account is closed and reopen it the day after I settle. Some creditors will pull a report when re-opening and re-evaluate the line, etc but most will just reopen it if it's done w/in 6 months of when it closed.

Botton line, if/when I'm denied for a loan because of it, there are easy steps to take to get around the denial. I sleep fine at night.

Closing an account, even for a day, puts a mark on your report. From the link posted above about the 2008 changes:

* Don't close accounts. Fair Isaac has made it clear that closing accounts can never help a classic FICO score and may hurt it. With FICO 08, that's even truer. The new scoring formula wants to see evidence that you are actively and responsibly using credit. So you get more points for having open accounts in good standing; conversely, having a higher proportion of closed accounts can hurt you more.

The bottom line here is that simply having available credit does not help your FICO and it does not increase the chances of you getting a better loan. All you really need to do is make sure you have a variety of different types of credit and that is actively used. Beyond that, more available credit can only result in hurting your chances at getting better loans and interest rates.

 

[Ns1]

Originally posted by: Xavier434

Originally posted by: SoulAssassin

Originally posted by: Gooberlx2

Originally posted by: SoulAssassin
Let it continue to grow, better yet, call all of your credit card companies in one day and request to have your lines increased to the maximum they will do. I have over 1/4 million in available credit and it isn't hurting my score at all.

But when you go for a loan, credit score isn't the only thing a lender looks at.

No doubt. The only time it really becomes an issue is when you have a lender that views it as a risk. My high FICO, minimal debt and high income (I swear this isn't a typical ATOT I make 200 billion a year post) generally doesn't translate into risk when combined with the high lines. The only time I might see an issue is when I go to sell my house and get another mortgage. If they are worried about it I can close the accounts, get a letter from them stating the account is closed and reopen it the day after I settle. Some creditors will pull a report when re-opening and re-evaluate the line, etc but most will just reopen it if it's done w/in 6 months of when it closed.

Botton line, if/when I'm denied for a loan because of it, there are easy steps to take to get around the denial. I sleep fine at night.

Closing an account, even for a day, puts a mark on your report. From the link posted above about the 2008 changes:

* Don't close accounts. Fair Isaac has made it clear that closing accounts can never help a classic FICO score and may hurt it. With FICO 08, that's even truer. The new scoring formula wants to see evidence that you are actively and responsibly using credit. So you get more points for having open accounts in good standing; conversely, having a higher proportion of closed accounts can hurt you more.

The bottom line here is that simply having available credit does not help your FICO and it does not increase the chances of you getting a better loan. All you really need to do is make sure you have a variety of different types of credit and that is actively used. Beyond that, more available credit can only result in hurting your chances at getting better loans and interest rates.

account in good standing =/= account with balance. Having available credit DOES help your score because of your balance/available credit ratio. You don't need to spread your spending over your cards, it's an aggregate total (although you're also penalized if one of your cards is heavily utilized)

but hey, do what you want and I'll do what I want.

 

[Xavier434]

Originally posted by: Ns1

Originally posted by: Xavier434

Closing an account, even for a day, puts a mark on your report. From the link posted above about the 2008 changes:

* Don't close accounts. Fair Isaac has made it clear that closing accounts can never help a classic FICO score and may hurt it. With FICO 08, that's even truer. The new scoring formula wants to see evidence that you are actively and responsibly using credit. So you get more points for having open accounts in good standing; conversely, having a higher proportion of closed accounts can hurt you more.

The bottom line here is that simply having available credit does not help your FICO and it does not increase the chances of you getting a better loan. All you really need to do is make sure you have a variety of different types of credit and that is actively used. Beyond that, more available credit can only result in hurting your chances at getting better loans and interest rates.

account in good standing =/= account with balance. Having available credit DOES help your score because of your balance/available credit ratio. You don't need to spread your spending over your cards, it's an aggregate total (although you're also penalized if one of your cards is heavily utilized)

but hey, do what you want and I'll do what I want.

Debt to income ratio is what is heavily considered when lenders are determining your risk. Balance/available credit might be considered too, but that ratio is basically just a fraction of what the debt to income ratio is supposed to show when you think about it since the debt to income ratio takes into consideration available credit, bad debt (including CC balances), good debt, and income. See my previous post about that. Also, it isn't just about having accounts in good standing. It is about using those accounts and keeping them active while not going overboard. That is why having a lot of available credit being helpful is often a misconception. It is not about the available credit. It is all about what kind of credit it is considered by lenders and how you are using it. Another quote from the 2008 changes link:

* Keep your accounts active. In the past, the biggest risk from letting accounts be inactive is that your lenders might close them, thus dinging your scores. Now simply having too many inactive accounts could count against you in some circumstances. Once again, the new scoring formula is looking for evidence you can responsibly manage credit. Consider keeping your oldest and highest-limit cards active by charging something to them each month (making sure to pay the balance off in full, of course).

 

[Ns1]

Originally posted by: Xavier434

Originally posted by: Ns1

Originally posted by: Xavier434

Closing an account, even for a day, puts a mark on your report. From the link posted above about the 2008 changes:

* Don't close accounts. Fair Isaac has made it clear that closing accounts can never help a classic FICO score and may hurt it. With FICO 08, that's even truer. The new scoring formula wants to see evidence that you are actively and responsibly using credit. So you get more points for having open accounts in good standing; conversely, having a higher proportion of closed accounts can hurt you more.

The bottom line here is that simply having available credit does not help your FICO and it does not increase the chances of you getting a better loan. All you really need to do is make sure you have a variety of different types of credit and that is actively used. Beyond that, more available credit can only result in hurting your chances at getting better loans and interest rates.

account in good standing =/= account with balance. Having available credit DOES help your score because of your balance/available credit ratio. You don't need to spread your spending over your cards, it's an aggregate total (although you're also penalized if one of your cards is heavily utilized)

but hey, do what you want and I'll do what I want.

Debt to income ratio is what is heavily considered when lenders are determining your risk. Balance/available credit might be considered too, but that ratio is basically just a fraction of what the debt to income ratio is supposed to show when you think about it since the debt to income ratio takes into consideration available credit, bad debt (including CC balances), good debt, and income. See my previous post about that. Also, it isn't just about having accounts in good standing. It is about using those accounts and keeping them active while not going overboard. That is why having a lot of available credit being helpful is often a misconception. It is not about the available credit. It is all about what kind of credit it is considered by lenders and how you are using it. Another quote from the 2008 changes link:

* Keep your accounts active. In the past, the biggest risk from letting accounts be inactive is that your lenders might close them, thus dinging your scores. Now simply having too many inactive accounts could count against you in some circumstances. Once again, the new scoring formula is looking for evidence you can responsibly manage credit. Consider keeping your oldest and highest-limit cards active by charging something to them each month (making sure to pay the balance off in full, of course).

Fair enough. To be fair, I've only glanced over the FICO2008 rules since they don't seem to be in full effect yet.

 

[Xavier434]

Originally posted by: Ns1


Fair enough. To be fair, I've only glanced over the FICO2008 rules since they don't seem to be in full effect yet.

I will say this much. If FICO scores ever get calculated in favor of lots of available credit then I will be one happy camper! Building available credit is ridiculously easy unless your history already sucks.

 

[Ns1]

Originally posted by: Xavier434

Originally posted by: Ns1


Fair enough. To be fair, I've only glanced over the FICO2008 rules since they don't seem to be in full effect yet.

I will say this much. If FICO scores ever get calculated in favor of lots of available credit then I will be one happy camper! Building available credit is ridiculously easy unless your history already sucks.

haha. I'm busy paying down my personal side so I can't really mess with it too much. I'm working on building my business credit right now.

 

[SoulAssassin]

Originally posted by: Xavier434

Closing an account, even for a day, puts a mark on your report. From the link posted above about the 2008 changes:

* Don't close accounts. Fair Isaac has made it clear that closing accounts can never help a classic FICO score and may hurt it. With FICO 08, that's even truer. The new scoring formula wants to see evidence that you are actively and responsibly using credit. So you get more points for having open accounts in good standing; conversely, having a higher proportion of closed accounts can hurt you more.

You are reading too far between the lines. First of all, most cc companies only report monthly so closing an opening within that period would more than likely not even be reported. Secondly, reducing credit lines to 1K or 5K is also an option. Third, often times a closed account will continue to report in good standing even after it closed. Worst case scenario it doesn't report for a month or two and then it starts reporting again. NBD.

The bottom line here is that simply having available credit does not help your FICO and it does not increase the chances of you getting a better loan. All you really need to do is make sure you have a variety of different types of credit and that is actively used. Beyond that, more available credit can only result in hurting your chances at getting better loans and interest rates.

I would argue that it increases your chances of being approved for a higher line of credit and possibly a lower rate due to an increased FICO as a result of a lower utilization %. I agree with your second statement.


<-Has worked in the cc industry for just over 10 years now
<-Needs to move out of DE one of these days