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Has anyone gotten burned by having too high CL?

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Anonymous
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Has anyone gotten burned by having too high CL?

Has anyone out there been burned by having too much available credit? I've never really though about it before, but now approching nearly $100K of available CL, I am starting to ponder this. There are many of you out there with WAAAAY more available CL than me, so am curious to pick brains. I know It is supposed to be a myth that high CL's (even with low utl) impact the mortgage process but still find a lot of conflicting information on this. I'm planning on buying an additional property in the next year or so and am a tad concerned. Would love to hear personal experiences with this. 

Message 1 of 26
25 REPLIES 25
-Cal-
Valued Contributor

Re: Has anyone gotten burned by having too high CL?

$100k isn't a lot of available credit, but it is subjective to your income. There are cases where your total available credit can come into question.

 

For a real estate loan, my advice to you is not to worry about this until you find yourself in a situation where a loan officer or underwriter brings this up as an issue. They will provide you with an opportunity to make any necessary adjustments. 

 

I have seen some people mentioned they've been denied for a trade line because they have too much available credit, but YMMY (re-read my first sentence). 

 

Good Luck

Message 2 of 26
Anonymous
Not applicable

Re: Has anyone gotten burned by having too high CL?

Thanks for the input. For reference, my annual income is approximately $150K. I would think $100K available credit (which is more than plenty for my needs - current utl around 2%) against my income wouldn't be considered risky, but am not sure. 

Message 3 of 26
Anonymous
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Re: Has anyone gotten burned by having too high CL?

You are just fine. At 150k a year, you could safely have 300-450k in CLs....  

Message 4 of 26
Anonymous
Not applicable

Re: Has anyone gotten burned by having too high CL?


@Anonymous wrote:

You are just fine. At 150k a year, you could safely have 300-450k in CLs....  


LOL that's just crazy to me. It is amazing that when you need money extended to you, no one is willing to give it. Yet, when you don't need it, everyone wants to give it to you Smiley Happy 

Message 5 of 26
Anonymous
Not applicable

Re: Has anyone gotten burned by having too high CL?


@Anonymous wrote:

Has anyone out there been burned by having too much available credit? I've never really though about it before, but now approching nearly $100K of available CL, I am starting to ponder this. There are many of you out there with WAAAAY more available CL than me, so am curious to pick brains. I know It is supposed to be a myth that high CL's (even with low utl) impact the mortgage process but still find a lot of conflicting information on this. I'm planning on buying an additional property in the next year or so and am a tad concerned. Would love to hear personal experiences with this. 


Income has a lot to do with it. If you earn, say $40K a year and already have $200,000 in available credit, a lender could deny you based on insufficient income.  

Message 6 of 26
Anonymous
Not applicable

Re: Has anyone gotten burned by having too high CL?

Your limits to income ratio is fine. At our house our only concern has been card theft.  I once had some one steal a blank check on an account with $20K in overdraft rights. In 3 days the person used it before I even knew it,   $20K  in overdrafts by having checks printed and paid to them selves. My dw locks her purse in the office safe because of her Amex card and Spark card limits. Both have high limits.    

Message 7 of 26
Themanwhocan
Senior Contributor

Re: Has anyone gotten burned by having too high CL?


@Anonymous wrote:

@Anonymous wrote:

You are just fine. At 150k a year, you could safely have 300-450k in CLs....  


LOL that's just crazy to me. It is amazing that when you need money extended to you, no one is willing to give it. Yet, when you don't need it, everyone wants to give it to you Smiley Happy 


"A bank is a place that will lend you money if you can prove that you don't need it" - Bob Hope





TU-8: 804 EX-8: 805 EQ-8: 788 EX-98: 767 EQ-04: 752    
TU-9 Bankcard: 837 EQ-9: 823 EX-9 Bankcard: 837
Total $443,800
Message 8 of 26
Ghoshida
Valued Contributor

Re: Has anyone gotten burned by having too high CL?


@Anonymous wrote:

@Anonymous wrote:

You are just fine. At 150k a year, you could safely have 300-450k in CLs....  


LOL that's just crazy to me. It is amazing that when you need money extended to you, no one is willing to give it. Yet, when you don't need it, everyone wants to give it to you Smiley Happy 


And therefore you should build credit when you can, so that in case of an event, you aren't blindsided.

 

While credit is not the same as an emergency fund, a large CL provides a cushion against dipping scores when suddenly your utilization is a bit high.

Message 9 of 26
Anonymous
Not applicable

Re: Has anyone gotten burned by having too high CL?

I've wondered about this. I'm currently at $103.5K CL vs $105K income and worry  it is too much available credit. It is more than I'll ever need. I've thought about closing a card I don't really need anymore in case it affects me getting a card I do want.

Message 10 of 26
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