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Effect of average credit limit of card on credit score

New Contributor

Effect of average credit limit of card on credit score

Does average credit line has any effect on credit score?

 

When I pulled my free credit score from US Bank Cash + website, in one of the notes, it mentioned that my average credit line higher than $9000 is helpful. The average  was higher earlier but with only $1000 from Target Redcard last month, it may have come down.

 

I donot find lot of discussion on this point therefore was wondering how important average CL is.

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Valued Contributor

Re: Effect of average credit limit of card on credit score

I think this may pertain only to FAKO scores, but I recall some years ago that on EX monitoring, one of the negative reason codes was that my total (not average) was less than $2K.  However I have not seen anything to back this up for real FICO scores.   I would think that on a manual review it might be an issue but maybe on computer generated approvals its not such an issue as long as your util is low.  I'm just throwing out something here because this question has been on my mind as well.


Major CC's - Barclay's ($5.5K) | Barclay's Sallie Mae MC ($5K) | DCU ($7.5K) | Discover IT ($1.4K) | Genisys Visa ($1.4K) | NFCU Visa ($22K) | Navcheck ($15K) | Chase Freedom ($5K) | SDFCU Visa ($8K) | Amex BCP ($9.5K) | Amex Delta ($10K) |Store CC's| -Amazon ($4K) | Catherines ($850) | JCP ($4K) | Macy's ($1.7K) | Avenue ($850) | Victoria's Secret ($1.4K) | Walmart ($4.1K) | Paypal SC ($1.3K) | HSN ($2.5) | Sears ($2.6K) | Sams Club ($4.1K) |Goal|: Age with grace to 750 across the board |Last app|: 3/3/2014
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Valued Contributor

Re: Effect of average credit limit of card on credit score


Rhaeny wrote:

I think this may pertain only to FAKO scores, but I recall some years ago that on EX monitoring, one of the negative reason codes was that my total (not average) was less than $2K.  However I have not seen anything to back this up for real FICO scores.   I would think that on a manual review it might be an issue but maybe on computer generated approvals its not such an issue as long as your util is low.  I'm just throwing out something here because this question has been on my mind as well.


 

Yep. Many FAKOs factor in CLs. FICO's don't. VantageScore does but while it isn't a FAKO (doesn't have a FICO like range) it isn't used by more than a few creditors for decisioning) .  Banks may suppliment FICO scores with other info such as CLs. If any decisioning lists this as a factor then it is but it's not a factor in FICO.


I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

WM Discover $1800, WF Plat 12k, Chase Freedom Siggy18k, Amex Plat (60k H/B), Citi AA EWMC 25k
Message 3 of 4
Valued Contributor

Re: Effect of average credit limit of card on credit score

Yep my FAKO Experian account says my average credit limit of less than $2,000 is hurting me because lenders don't trust me with higher limits. And could possibly be why my FAKO scores are around 650 and myfico scores are around 700. Even though it is worthless, i'm curious to see what my score jumps to when the new $2,500 CL from Capital One posts. I'll be watching myfico as well to see if it changes too. Will post findings...should be only a couple of days as my statement just cut.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Smiley Happy Last App: 4/5/13 Gardening until July 2014
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