Credit Limit and FICO score - a logical approach

[Anonymous]

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MidnightVoice wrote:

Yes there is - nowadays some mortgage companies are looking at total available credit, and sometimes they tell customers they have too much.

This isn't even a new thing.  Way back in the mid-90's I bought a house, no down payment, 98% financed with a state grant to cover the closing costs and the rest, and I was told I had too high of a CL on my only CC, it was around $5000 (it was a student card and I was still in school).  The bank didn't like it and made me request a lower limit of just $1000.  A few months after closing I called and had it raised again.  Obviously my situation was a little unique as I was still in school and didn't have much of an income.

[haulingthescoreup]

Since we're not going anywhere soon in mortgage land, I'm not worrying about scaring them off.

I came up with a completely different set of targets:

total bank/ CU card CL equal to or a bit more than annual income

each bank card with a CL in 5 figures, i.e. $10K or more

each store card with a CL in 4 figures, i.e. $1K or more

There's probably some reverse reasoning involved in this, as my ultimate goal is 5 or 6 good CU and bank cards, plus a smattering of store cards, so I wound up looking at my current CU CL's and working the difference for the rest.

[Anonymous]

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@haulingthescoreup wrote:
Since we're not going anywhere soon in mortgage land, I'm not worrying about scaring them off.

I came up with a completely different set of targets:

total bank/ CU card CL equal to or a bit more than annual income

each bank card with a CL in 5 figures, i.e. $10K or more

each store card with a CL in 4 figures, i.e. $1K or more

There's probably some reverse reasoning involved in this, as my ultimate goal is 5 or 6 good CU and bank cards, plus a smattering of store cards, so I wound up looking at my current CU CL's and working the difference for the rest.

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A total CL amongst all cards equal to or greater than household income?

If you're living in a major urban area and have two white collar professionals working full time, that could be a pretty dang huge credit line....enough to buy a house in some places.

What's your reasoning for picking that particular value?

[haulingthescoreup]

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@Anonymous wrote:

A total CL amongst all cards equal to or greater than household income?

If you're living in a major urban area and have two white collar professionals working full time, that could be a pretty dang huge credit line....enough to buy a house in some places.

What's your reasoning for picking that particular value?

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I didn't say household income.

And as I said, this is partly because I already have $47K in CL's on my 3 CU cards alone. I'm currently looking at winding up with these three, the existing BofA, and a Chase Freedom or equivalent, plus store cards and the AmEx Gold, and maybe, maybe a`Blue or Blue Sky, but a good chance not. My total income from two jobs is around $65K, so backing up from there, there you are.

We're certainly not in a major urban area --we have had deer, bears, and stray cattle on our property, and our collars are off-white at best. HHI is around #135K.

For my situation, annual income seems as reasonable a figure to shoot for as anything else.

[FretlessMayhem]

I'm thinking very strongly of refinancing out of my ARM with NFCU in the foreseeable future. Hopefully they won't have an issue with too much available credit.

I have about 25 percent more than my annual income in available credit. However, it's across several accounts with fairly substantial CLs.

The way they have been so far I don't see it being an issue, but this thread has me worrying.

[haulingthescoreup]

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@FretlessMayhem wrote:
I'm thinking very strongly of refinancing out of my ARM with NFCU in the foreseeable future. Hopefully they won't have an issue with too much available credit.

I have about 25 percent more than my annual income in available credit. However, it's across several accounts with fairly substantial CLs.

The way they have been so far I don't see it being an issue, but this thread has me worrying.

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I've read several posts that if a mortgage lender wants you to reduce your available credit, you call your CCC's, tell them what's happening, and that you'd like to temporarily drop your limits until you get through the mortgage process, and then have them restored.

This happens often enough that CCC's who give big CL's are familiar with it and shouldn't have a problem. I would certainly get the name and employee number of whomever I spoke with, and confirm with someone higher up if they seem at all unsure of how this works.

And no need to do this until you settle on a house and a lender, and you're approaching the paper-signing stage. You don't need to do a preemptive strike.