Increase Secured Card Limits or No

[CostantinoA]

I am rebuilding my credit.  Here is my situation!

I started rebuilding 09-2014 when my credit was 551 on Transunion and 544 on Equifax.  As of today, I have gotten it to 634 on TransUnion and 571 on Equifax.  I have obtained a bunch of credit since 09-2014.  Here is the break down.  I believe my stragity is working as my scroes have gone up a good amount in less than a year and really most of my new credit was obtained in the last 4 months.

09-2014 Auto Loan

12-2014 Student Loan in repayment

Secured Cards:

$500, 03-2015, Open Sky

$1500, 05-2015, Capital One

$300, 06-2015, US Bank

$1000, 06-2015, Discover

Non Secured:

$350, 06-2015, First Savings

$400, 06-2015, Walmart

$600, 06-2015, Amazon

$500, 06-2015, Verve

$250, 06-2015, Victoria Secret

$550, 07-2015, Merrick Bank

$500, 07-2015, Surge

Authorized Use (Wife's Cards):

$500, 05-2015, Capital One

$200, 06-2015, Discover

I have a few extra thousand this month and I wanted to increase my Discover secured and my Capital One secured cards.  What does everyone think?  My goal is to be at 650 on both scores by the end of the year.  With the higher limits, I am sure this is possible.  Correct?

[needtodobetter]

Great job on your rebuild so far.

To answer your question, no, increasing your secured deposits / higher credit card limits, in and of itself, will not increase your scores.  It would help lower your utilization, but so would using that same money to pay off any balances on the cards.  FICO does not use credit card limits to determine any part of your score other than utilization.  

If you don't have balances and you have some savings, you could increase the limits of some of your secured cards.  Personally, I would only do that if the card has high potential to graduate, such as the Discover.  I know that Capital One does not graduate (but who knows what they will change in the future) and Open Sky will not graduate.   I am not sure about US Bank - I think I have seen some instances of it graduating.  

You could also just save the money and garden for a while.  That will increase your scores as you make on time payments and keep your utilization low.  

Good luck and congrats on your rebuilding!

[Jerry45]

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@needtodobetter wrote:

Great job on your rebuild so far.

To answer your question, no, increasing your secured deposits / higher credit card limits, in and of itself, will not increase your scores.  It would help lower your utilization, but so would using that same money to pay off any balances on the cards.  FICO does not use credit card limits to determine any part of your score other than utilization.  

If you don't have balances and you have some savings, you could increase the limits of some of your secured cards.  Personally, I would only do that if the card has high potential to graduate, such as the Discover.  I know that Capital One does not graduate (but who knows what they will change in the future) and Open Sky will not graduate.   I am not sure about US Bank - I think I have seen some instances of it graduating.  

You could also just save the money and garden for a while.  That will increase your scores as you make on time payments and keep your utilization low.  

Good luck and congrats on your rebuilding!

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+1. Well said. A strong payment history on your unsecured TL's, helps your score man than the secured card limits. I suggest closing your secured cards, your money in them is being wasted. Good luck

[Anonymous]

As others have said, your limits will not impact your scores outside of utilization.

Pay off any balances on your existing cards. For a maximum score, you want the statement balance on your report to show $0 for every card but 1, and for that card it should show a balance between 1-9 percent of its credit limit. Once the statement cuts, pay that off in full (so you never CARRY a balance).

Do you have any old unsettled debts that are holding down your scores? Pay those too.

Otherwise you would be better off with the extra money in an emergency savings account so you never fall behind on future payments. Adding the funds to a secured card that will never unsecure just ties them up.

[CostantinoA]

Can you please help me undstand this.

Why would I want to keep all accounts at zero except one.  If I am under 10% on all of them, isn't it best to use all the cards.. How is a bank suppose to see your payment history and increase your limit if you have never charged on their account? Right now, I set my cards to be at 9% until the bill out then I pay it in full.  Is this not the best way?  Please let me know.  Sorry I am new here.

[Anonymous]

Here is what I personally do.

If I want to see my best score, I have all cards report a zero balance except one which reports under 9 % utilization. This is best when applying for a loan, mortgagw,etc. Basically when you want your best score.

I never let over 30% utilization report. Ever.
I have let 25% report then paid it down.

But basically only letting one report under 9 % utilization is the best way to get your best score.

[needtodobetter]

From what I have gathered on the forum is that you can use all of the cards if you wish, but all of them except one should be paid in full prior to the statement date.  The one that you leave a balance on should report 9% or less.  That helps maximize the UTIL score for FICO.

[Anonymous]

It's mainly what you are trying to accomplish with your score.

[Anonymous]

Capital One does not release (lower) your credit limit so once it is deposited you must close the account.

There is a credit union (State Department Federal Credit Union) with 6.9% APR that had I known about would have saved a huge headache.

EMV Savings Secured Visa Platinum Card

Just requires membership with American Consumer Council (ACC).

[Anonymous]

You want all cards but one to REPORT a zero balance. You can run up as much as you want during the month, but make sure to pay it off in full before the statement date cuts. You'll also want to make sure you don't use those cards in the 2-3 days up to the statement date for this reason.