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Does an increase in your credit card limit increase your credit score?

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Anonymous
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Does an increase in your credit card limit increase your credit score?

Good morning!

 

One of my primary financial/personal goals is to increase my credit score so I have been asking numerous sources for advice on any number of issues. I was told that high credit card limits and low utilization ratios (10% and below) on these limits are good ways to increase a credit score. Is it true that an increase in your credit card limit will boost your credit score? Any advice would be appreciated! Thank you!

 

Sincerely,

 

Seeking Perfect Credit

Message 1 of 6
5 REPLIES 5
Anonymous
Not applicable

Re: Does an increase in your credit card limit increase your credit score?

yes

Message 2 of 6
Anonymous
Not applicable

Re: Does an increase in your credit card limit increase your credit score?

Great! Thanks!Smiley Wink

Message 3 of 6
vanillabean
Valued Contributor

Re: Does an increase in your credit card limit increase your credit score?

The FICO scoring takes credit utilization into consideration. Your payment history tops the five factors that make up your score and accounts for 35%. How much you owe is second with 30% and is measured relatively more so than absolutely. For credit cards, the utilization is the relation between credit card debt and credit card limits.

 

So it boils down to living within your means. If you do so, you are viewed as being low risk. Which translates into a higher score and being given better cards and low rates on loans. Having high credit card limits in itself to begin with doesn't guarantee any of that.

 

A noticeable percent of credit card holders asking for limit increases do so to increase spending rather than lower their credit utilization. As such, the answer to your question is perhaps as much no as it's yes.

 

Adding to the difficulty of the matter is that not all cards report the limit of your credit card. And even when it's done, a limit that's too high will be discarded for credit utilization.

 

With a monthly balance of $90 and a credit limit of $1,000, the credit utilization is 9%. To bring it down to 1%, there are two basic approaches. You can pay $80 before the balance is reported, or you can look into having your reported limit increased by $9,000.

 

It's my experience that the former is far easier than the latter. Smiley Very Happy

 

Message 4 of 6
Anonymous
Not applicable

Re: Does an increase in your credit card limit increase your credit score?

wow! this is great and exactly the type of advice I'm looking for, thanks very much!  Smiley Very Happy

Message 5 of 6
fused
Moderator Emeritus

Re: Does an increase in your credit card limit increase your credit score?

Welcome to the forums, SeekingPerfectCredit!

 

I'm locking this thread and directing you and others to your duplicate thread here . In the future, please do not cross-post (duplicate posting) in the forums, it makes things a bit messy in the forums.

 

Thank you for your contributions and cooperation!

 

--fused, myfico moderator       

Message 6 of 6
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