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Too Much Open Credit?

Frequent Contributor

Too Much Open Credit?

Is it possible to have too much open credit?  I have a utilization rate of 12%, and working to pay to 0 in the coming weeks, and I have a open credit line combined of 35+K.

 

I was thinking of making a few CLI limit increase request, 10-15K, but am not sure if the new open cl would affect my fico.

 

So in short...... Can you have too much open credit?

7 REPLIES
Established Contributor

Re: Too Much Open Credit?

Yes and no. It depends on your income.  If you make 15K a year then yes 35K might be too much and you'll be denied from future creditors.  If you make 150K a year then your good to go for CLI.

 

FICO pretty much ignores the size of your CL.  You could have a $500 limit card with an 800+ FICO.

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Epic Contributor

Re: Too Much Open Credit?


flowfaster wrote:

Yes and no. It depends on your income.  If you make 15K a year then yes 35K might be too much and you'll be denied from future creditors.  If you make 150K a year then your good to go for CLI.

 

FICO pretty much ignores the size of your CL.  You could have a $500 limit card with an 800+ FICO.


I would add it's more to the bank... Im not sure that is full proof but some banks seem to do approvals or increases based on score or matching other higher limits so you move business to them, some for CLI just go by account history... then you have Wells, Amex "sometimes", ummm forget... but i have seen at least with the wells unsecured line of credit up to $25k - My partner was pre-approved and didn't really want or think he should ask for more than 5 or so if he was going to apply, I was like no, you do ALL your banking there, just open it and let it sit, you never know later... so i made him ask for 25k... they came back and said based on income (direct deposit) they could do $16,200.

I say just keep doing what you want to do for new accounts and CLI as long as you are not looking for major purchase soon where the INQ could hurt you until someone tells you idfferently (meaning the bank denies and only reason is you are at max with them based on income)

Mega Contributor

Re: Too Much Open Credit?


Creditaddict wrote:

flowfaster wrote:

Yes and no. It depends on your income.  If you make 15K a year then yes 35K might be too much and you'll be denied from future creditors.  If you make 150K a year then your good to go for CLI.

 

FICO pretty much ignores the size of your CL.  You could have a $500 limit card with an 800+ FICO.


I would add it's more to the bank... Im not sure that is full proof but some banks seem to do approvals or increases based on score or matching other higher limits so you move business to them, some for CLI just go by account history... then you have Wells, Amex "sometimes", ummm forget... but i have seen at least with the wells unsecured line of credit up to $25k - My partner was pre-approved and didn't really want or think he should ask for more than 5 or so if he was going to apply, I was like no, you do ALL your banking there, just open it and let it sit, you never know later... so i made him ask for 25k... they came back and said based on income (direct deposit) they could do $16,200.

I say just keep doing what you want to do for new accounts and CLI as long as you are not looking for major purchase soon where the INQ could hurt you until someone tells you idfferently (meaning the bank denies and only reason is you are at max with them based on income)


Solid advice.

 




EQ FICO 548 3/3/16
Super Contributor

Re: Too Much Open Credit?

Sometimes too much open credit will keep you from getting approved during multiple apps, such as applying for 3 cards with sign up bonuses.

 

 

Valued Contributor

Re: Too Much Open Credit?

I only make 45k a year, and have about 180k in total revolving credit limits. No issues yet from creditors.
New Contributor

Re: Too Much Open Credit?

I think creditors care much more about your DTI ratio than they do your total credit limits.

 

I also have never had issues with large amounts of credit available.

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Total: $300,000+ in lines.
Valued Contributor

Re: Too Much Open Credit?

Go much credit should rarely be a problem.  Too much reported debt (remember even PIF you can report a balance) is the problem.  Too much recent credit can be a problem as lenders are nervous you can't handle the new credit.

 

So, OP yes your util will go down with new available credit.  CLIs won't hurt you too much as worse case you are just taking inquiries.  New cards will probably overall hurt your credit initially  Your util is pretty low and not much to be gained from score there.  And you will take hits on credit for new account, new inquiry, lower AAoA.  However, new cards might make sense to build out your credit for longterm or for BT if it is going to take you a while to pay off.  Or for the signup bonuses. 

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