Should I Increase My Credit Card Limit?
Situtation:
Good income.
FICO around 700
195k mortage obligation
One credit card with 10 years service and a limit of 6200
Would I/ could I benefit from increasing my credit card limit?
I first got this card before college and I made like 5k a year.... I use my card for everything but pay it all off every month... dividend card, hey 300 free bucks a year.
I want to buy one or more rental in the next year and I might seek financing.
If I asked for a 20k limit would that be out of line?? I have no doubt I can manage it and afford it.
Would a "hard pull" hurt me?
Thanks a lot
A higher line of credit will likely cause your credit scores to go down-- at least for a time. The credit scoring companies will assume you will max out your card and be a higher risk.
Your policy of paying off your credit card debt every month is good. Since you can afford to pay it off you might think of writing checks or carrying a little more cash to cover expenses. This might eliminate the need to increase your credit card limit by a large amount.
Nathan14,
I am not joking. There are many sources on the internet that discuss new credit and attempts to get new credit. Every one of these that I have found indicates a negative effect on credit scores. My mortgage broker tells me the same thing. Going from a limit of $6.2K to $20K is a substantial leap of faith for Credit Reporting Agencies to swallow.
Over time as the credit becomes more mature and if the average loan balance is small compared to available credit and payments are made on time, then credit scores will become more favorable.
Nathan,
Those are interesting percentages. Where did you get those. I was wondering how the FICO was calculated.
Nathan,
Those are interesting percentages. Where did you get those. I was wondering how the FICO was calculated.
always increase & use
So is it good to increase some credit limits as the balance/credit ratio will decrease? Or is it better to hold off any changes to credit limits. Is is bad to open some extra credit cards (with very little balance)? How about debit cards? Will they affect credit scores?
I will need to get finances soon, so I would like to be able to increase credit scores (not decrease).
Thanks!