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How important are credit limits?

Valued Contributor

How important are credit limits?

So I have a simply cash card as well as a couple Amex revolvers. I was wondering if I should use my cli for this 6 month period on my simply cash so that potential creditors of my company see a nice little 15k line, as opposed to a 5k line. What do you guys and gals think?



My Wallet:
WalMart: ||15k|| USAA Platinum MC: ||26k|| BCE: ||9k|| Chase Freedom Siggy: ||10k|| Discover it: ||6.5k|| SG Visa: ||11k||
USAA World MC: ||23k|| US Bank Cash+ Siggy: ||7.5k|| Citi TYP World MC: ||12k|| Barclays Arrival World MC: ||13k||Citi Double Cash World MC ||25k||Sallie Mae World MC ||18.8k||Fico Scores (3 Fico Monitoring): EQ 751,TU 749, EX 743. Last app: 9-12-14 Sallie
6 REPLIES
Epic Contributor

Re: How important are credit limits?

I don't think the CL's matter really for business.

especially when you are talking about creditors that you PG because that's all they are going off of is your personal credit.

Valued Contributor

Re: How important are credit limits?

I mean, I would like my firm to stand on its own--without the need to pg everything. But having said that, I can PG everything. I really want to find a way to build my company credit to the point that it can acquire mortgages to buy income producing real estate.



My Wallet:
WalMart: ||15k|| USAA Platinum MC: ||26k|| BCE: ||9k|| Chase Freedom Siggy: ||10k|| Discover it: ||6.5k|| SG Visa: ||11k||
USAA World MC: ||23k|| US Bank Cash+ Siggy: ||7.5k|| Citi TYP World MC: ||12k|| Barclays Arrival World MC: ||13k||Citi Double Cash World MC ||25k||Sallie Mae World MC ||18.8k||Fico Scores (3 Fico Monitoring): EQ 751,TU 749, EX 743. Last app: 9-12-14 Sallie
Epic Contributor

Re: How important are credit limits?

I think it needs a balance sheet more then credit lines... Cash is there, loans will come
Valued Contributor

Re: How important are credit limits?

American Express hasn't reported to Equifax, Dun and Bradstreet or Experian for me. So they may not report anywhere anyway.

Valued Contributor

Re: How important are credit limits?

Interesting..... I understood that Amex does report to business credit (ie exp and DNB).



My Wallet:
WalMart: ||15k|| USAA Platinum MC: ||26k|| BCE: ||9k|| Chase Freedom Siggy: ||10k|| Discover it: ||6.5k|| SG Visa: ||11k||
USAA World MC: ||23k|| US Bank Cash+ Siggy: ||7.5k|| Citi TYP World MC: ||12k|| Barclays Arrival World MC: ||13k||Citi Double Cash World MC ||25k||Sallie Mae World MC ||18.8k||Fico Scores (3 Fico Monitoring): EQ 751,TU 749, EX 743. Last app: 9-12-14 Sallie
Highlighted
Regular Contributor

Re: How important are credit limits?

Swapmeet,

 

I work for a firm that is involved with business financing and leasing, and in my experience, the higher your CC limits, the better.

 

There are several reasons behind this:

   1) Commercial lenders will want to see that you have greater than 25% of your total revolving credit available. Above 40% revolving credit available is ideal. The higher the limits, the better your % of revolving credit available (unless you start using more of it).

   2) If you had previous CC debt charged off, lenders will want to see that you have rebuilt your CC limits since the BK/chargeoff. Ideally, they want to see that your new CC limits are close to or greater than the amount you had written off.

   3) Higher limit CCs show business lenders that other creditors were willing to extend you higher limits, so it makes them feel more comfortable about extending near the same amount to you. Though CCs help show comparable credit, it is best to have comparable installment credit (auto loans, HELOCs) near the amount you are looking to take down.

 

Please note that though student loans are seen as installment loans, they carry much less weight toward your comparable borrowing history than auto loans or other business loans or leases.


Starting Scores (lender pull 3/27/10): 759 (EQ), 752 (TU), 749 (EX)
Current Scores (myFICO 4/4/11): 768 (EQ)
Goal Scores: 800


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