Income to support CL's

[Anonymous]

Ok, So I make roughly 42k/yr and currently am rebuilding my credit.  But since I don't have ton's of income to justify a large credit limit.  What is a reasonable CL for someone with my income once they have scores 720 and above range?  I just want to know what to be expecting so I don't shoot too high and don't sell myself short.

J

[Anonymous]

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MinnesotaJ wrote:

Ok, So I make roughly 42k/yr and currently am rebuilding my credit.  But since I don't have ton's of income to justify a large credit limit.  What is a reasonable CL for someone with my income once they have scores 720 and above range?  I just want to know what to be expecting so I don't shoot too high and don't sell myself short.

J

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IMO, the lower of:

...the amount you trust yourself to handle well.

...the amount your creditors are willing to give you.

Sorry to be so vague.

Message Edited by cheddar on 03-10-2008 10:01 PM

[Anonymous]

Vague but fair...

I just am curious how much of a difference I'll see between subprime and after credit rehab.  I've already done the "gone stupid" thing and know how to never get 100 feet from that ledge again.  I'm afraid the fall would kill me.

I'm probably just pessamistic and think I'll forever be limited to low amounts, until one day I get approved for some amount that causes me to sit down and cry...but the good kind of crying. 

I doubt with my experience if I'd ever use more than 2k at any given time...I just want limit high enough to not cause me to ever take hits for util using too much.

[Anonymous]

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MinnesotaJ wrote:

Vague but fair...

I just am curious how much of a difference I'll see between subprime and after credit rehab.  I've already done the "gone stupid" thing and know how to never get 100 feet from that ledge again.  I'm afraid the fall would kill me.

I'm probably just pessamistic and think I'll forever be limited to low amounts, until one day I get approved for some amount that causes me to sit down and cry...but the good kind of crying. 

I doubt with my experience if I'd ever use more than 2k at any given time...I just want limit high enough to not cause me to ever take hits for util using too much.

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OK, in that case I can give a more detailed answer.

Your magic number is $23K. in total revolving CL.

That will allow you to use up to $2K at any time without having to play the FICO "pay before reporting date" game.

Message Edited by cheddar on 03-10-2008 10:21 PM

[Anonymous]

Ok I understand that I'd need to have less than 10% Util to have the best score...but for someone making 42k/yr is it realistic to expect to have 23k in available revolving credit?  That's like 50% of my gross income.  If I was a lender I would look at that person's income and have a hard time not laughing when they were asking me for 5k in credit when they already had 18k available...

[Anonymous]

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MinnesotaJ wrote:

Ok I understand that I'd need to have less than 10% Util to have the best score...but for someone making 42k/yr is it realistic to expect to have 23k in available revolving credit?  That's like 50% of my gross income.  If I was a lender I would look at that person's income and have a hard time not laughing when they were asking me for 5k in credit when they already had 18k available...

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With good scores and spotless payment history, 50% of income is nothing.  2-3 times income is not unheard of.  Even more sometimes.

[Anonymous]

ok....that answered my question.  Thank you very much Cheddar....you're very sharp.

(couldn't resist the pun)

[Anonymous]

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MinnesotaJ wrote:

ok....that answered my question.  Thank you very much Cheddar....you're very sharp.

(couldn't resist the pun)

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Ha! Thanks.

And you're quite welcome.  Glad we eventually got there, even if we took the scenic route.

[MidnightVoice]

Fron CNN:

http://www.bankrate.com/cnn/news/cc/19980720.asp

Stephen Brobeck, executive director of Consumer Federation of America, agreed.

"In general, households should not carry lines on credit cards that exceed 20 percent of gross income," Brobeck said. "And smart consumers carry no credit balance from month to month." Brobeck sees high credit lines, especially those targeted toward low- and moderate-income households, as a key factor in the growing number of personal bankruptcies.

Why all the fuss about unused credit lines? First off, lenders view all open credit lines as potential debt. Too much unused credit may affect a person's ability to qualify for a home or car loan.

"Unfortunately, too much available credit can hurt you if you apply for a mortgage or a car," Rhode said. "It's actually counted against you."

[Anonymous]

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MidnightVoice wrote:

Fron CNN:

http://www.bankrate.com/cnn/news/cc/19980720.asp

Stephen Brobeck, executive director of Consumer Federation of America, agreed.

"In general, households should not carry lines on credit cards that exceed 20 percent of gross income," Brobeck said. "And smart consumers carry no credit balance from month to month." Brobeck sees high credit lines, especially those targeted toward low- and moderate-income households, as a key factor in the growing number of personal bankruptcies.

Why all the fuss about unused credit lines? First off, lenders view all open credit lines as potential debt. Too much unused credit may affect a person's ability to qualify for a home or car loan.

"Unfortunately, too much available credit can hurt you if you apply for a mortgage or a car," Rhode said. "It's actually counted against you."

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Interesting article. It seems you always here that having to much credit either (a) hurts you or (b) helps you. One side of the aisle says new creditors see it as a "risk for possible debt" and on the other side of the aisle they say creditors see it as "someone who really knows how to manage credit."

Eithier way my creidt almost matches my income level and I've never had a problem getting a great a car loan...however, maybe for a mortgage it will be different...