@Anonymous wrote:Recently read an article at http://www.ehow.com/how_6070056_raise-100-points-6-months.html that states:
'Contact any lenders where you have a lineofcredit, including credit cards and home equity lines of credit. Reduce your line of credit as much as possible--that is, close to the amount you currently owe on the account. Eliminating this easy access to credit reduces your risk as a borrower immediately and so helps raise your credit score quickly.'
Well, needless to say, I have a line of credit that shows up as revolving credit on my reports. For better or worse, this line of credit represents well over 65% of my available credit. Although my utilization on this account is less than 5% (other RC accounts currently 0%) I am somewhat confused by this statement to reduce available credit to improve scores.
I can see how a lender might be concered about this additional debt potential but do not see how reducing this could help my credit scores.
Should I dismiss this information as flawed or have I missed something?
IMO and I am not an expert but to me it seems like that would Kill your UTIL and damage not help your scores
Starting Score: 377EQ/350EX/400TU As of 11/2011
Ditto. Be careful of what you read on the internet (but we're good of course 
).
Let's say you have a line of credit (LOC) at $10,000 with a balance of $2500, a CC with a CL of $5000 and a balance of $1000, and another CC with a balance of $0 with a CL of $2000. In this example, your overall utilization is 20% ($3500/$17000). Your 20% utilization isn't too bad, but could use some improvement for additional points.
If you then decide to call your creditors and ask them to slash your CLs. Let's say they don't question your sanity and follow through with your request and that $10,000 CL with the LOC drops to $3000, the $5000 CL CC turns into $1500, and that $2000 CC turns into $500. Your new CL total is $5000 from $17000 before. Your balances would still be the same at $3500.
Your new overall utilization spikes from 20% to 70%. That's huge. That would be a potential drop of 40-80+ points just by that action. Not only that, current creditors and future creditors won't know why you did that. They now see that you are maxing out your credit cards and that your scores dropped. There's a high chance that they'll cut your limits even further if that new utilization carries over time.
There's a lot of conflicting and confusing information out there.
