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New Member
Posts: 5
Registered: ‎06-02-2009
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Can CL be too high?

A couple quick (and hopefully easy) questions.

 

First, I only have a single card. I have read on this forum that 4 or more cards is "optimal" for FICO. Is that accurate? I have no real need of any more cards, so what kind of long term boost would opening up more lines do? Worth my time?


Second, the one card I have right now has a $35,000 credit limit. I use it regularly, but pay it off every month, so it's never beyond 5-9% util. Is there such a thing as having too much credit?

 

Thank you in advance.

Regular Contributor
Posts: 180
Registered: ‎05-01-2009
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Re: Can CL be too high?

If your credit score is in the range that you would like, then you should be fine.  There are several caveats, though...

 

It is always a good idea to have a backup card in your wallet and a backup card at home.  In case the unforeseen happens, you are covered.

 

The other boost to your score is to pay your charges down to a small amount on your cc before the statement is cut.  CCCs list your utilization as of the statement cut date (in most cases), so this will help you should charge at a 5-9% utilization of that card.  1-4% with one card reporting (if you have more than one card) is optimal according to numerous posts on this site.  I have just started that technique and have seen a score increase already.


Starting Score: TU 766 EQ 788
Current Score: TU 788 EQ 811
Goal Score: TU 800 EQ 800


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Epic Contributor
Posts: 20,893
Registered: ‎03-19-2007
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Re: Can CL be too high?

[ Edited ]

The main dividing line in most credit scoring algorithms that are published is what is called a "thin" and "thick" crediit file, and having at least three bank cards is the normal criteria.  I suggest three cards.

Having a lot of cards or a high CL wont hurt per se, if you manage them.

But here is where it can hurt.

FICO scores about 50/50 on overall %revovl util, and indiv. card util.  Indiv card util looks at % util on each card, and also at the percent of all cards that show any balance at the time reported. Normal wisdom is to have at least half of your CCs reporting 0 balance.  If you have three cards, that is easy.  If you have ten cards, that is a lot of monitoring.  If you have a low CL HSBC and make any charges on it that are not PIF, then its util will be high that month.

I dont need ten credit cards in my wallet, trying to keep all of them active, keeping the %util on each below 10%, and then making sure that less than half show any balance.  If you want to reap the extra CL from those additional cards and go through the monthly monitoring, then more power to you.

I dont.

 

 

Message Edited by RobertEG on 06-03-2009 07:08 PM
Message Edited by RobertEG on 06-03-2009 07:10 PM
Senior Contributor
Posts: 4,831
Registered: ‎04-20-2007
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Re: Can CL be too high?

I don't know if TU would pick up that 35K card. I know I got a score ding for allowing only my 40K NFCU report. 
Senior Contributor
Posts: 3,071
Registered: ‎05-17-2007
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Re: Can CL be too high?

[ Edited ]

smallfry wrote:
I don't know if TU would pick up that 35K card. I know I got a score ding for allowing only my 40K NFCU report. 

Good point. If all revolving cards report too high, FICO might think you don't have any. I think the dividing line is around $30-$40k for TU, around $50k for Eq, not sure about EX. If you want to keep them as revolving I would not go too high.

 

I would like to know where the dividing line is for TU. I'm going to have to search records. I think it is over $30k but sure exactly sure where it stops. I'm going to try and see what I can find.

Message Edited by ilovepizza on 06-05-2009 01:55 PM
If we never set higher goals we would never get as far.
sol, credit 101, acr, abbreviations, calc
Senior Contributor
Posts: 4,831
Registered: ‎04-20-2007
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Re: Can CL be too high?


ilovepizza wrote:

smallfry wrote:
I don't know if TU would pick up that 35K card. I know I got a score ding for allowing only my 40K NFCU report. 

Good point. If all revolving cards report too high, FICO might think you don't have any. I think the dividing line is around $30-$40k for TU, around $50k for Eq, not sure about EX. If you want to keep them as revolving I would not go too high.

 

I would like to know where the dividing line is for TU. I'm going to have to search records. I think it is over $30k but sure exactly sure where it stops. I'm going to try and see what I can find.

Message Edited by ilovepizza on 06-05-2009 01:55 PM

I had the card reduced under 30K and it does show as a card being used now.

Established Contributor
Posts: 645
Registered: ‎10-24-2007
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Re: Can CL be too high?

From what I've read here and from my own experience you should receive a nice boost to scores by opening 2 new credit lines. You may receive an initial drop in scores for the new inquiries and new accounts reporting but this would be temporary. And actually my boost from the increased credit lines out weighed any drop for other reasons so my scores only increased.

 

I also agree with the above poster who said it was wise to keep at least 2 other cards for emergencies. 

Senior Contributor
Posts: 3,071
Registered: ‎05-17-2007
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Re: Can CL be too high?

I searched all my TU FICO's. I never bought any while I carried balances on revolving cards to see if they were counted. I don't have data where the rev/install cut off $ point is on TU. If anyone knows exactly please post.
If we never set higher goals we would never get as far.
sol, credit 101, acr, abbreviations, calc
Senior Contributor
Posts: 3,071
Registered: ‎05-17-2007
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Re: Can CL be too high?


smallfry wrote:



I had the card reduced under 30K and it does show as a card being used now.


Thank you. :smileyhappy:

If we never set higher goals we would never get as far.
sol, credit 101, acr, abbreviations, calc
Moderator Emeritus
Posts: 16,375
Registered: ‎03-12-2007
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Re: Can CL be too high?

Some months back, I let my 35K limit CC report a tiny balance. It was my only card reporting a balance and my TU score dropped 16 points for not using my credit cards. I believe the cutoff for TU is between 27.5K and 34.9K. My wife's 27K CC does factor in TU's revolving util.
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