Understanding FICO® Scoring

[brother7]

**bleep**

My oldest card is 14 years old with a $5000 CL. A long time ago, I went over the CL so the high balance **bleep**

[AndySoCal]

First who is the card with? How much on average do charge on the card? If you are using most the credit limit each month CLI would be something to consider.

[brother7]

The bleeps totally messed up my original post.

To repeat, for the past 5-6 years I've been very good managing my credit cards. My utilization is <10%, both overall and per-card. Most times, util is 1-2%.

My oldest card is 14 yrs old with a $5000 CL. A long time ago, I went over the CL so the high balance on my CR is $5200 for this card. Would it be advantagous to ask for a CLI for this card such that CL > high balance? Will a CLI increase my credit score due to the fact that my high balance is now below my CL?

[llecs]

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brother7 wrote:

The bleeps totally messed up my original post.

To repeat, for the past 5-6 years I've been very good managing my credit cards. My utilization is <10%, both overall and per-card. Most times, util is 1-2%.

My oldest card is 14 yrs old with a $5000 CL. A long time ago, I went over the CL so the high balance on my CR is $5200 for this card. Would it be advantagous to ask for a CLI for this card such that CL > high balance? Will a CLI increase my credit score due to the fact that my high balance is now below my CL?

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There was a glitch last night...

No, it wouldn't be advantagous. FICO is ignoring the high balance where a CL is listed. Lenders are ignoring it too. In the age of CLDs for non-use, changes in creditor standards, etc., it's not uncommon to see a high balance above the CL. Now if you want to ask for a CLI for the sake of a CLI, then that's OK. Just watch for any inquiry.

[Shogun]

+1 on the inquiry.  Some are hard, some are soft.  It just depends on the lender.  With a CLI it also gives you more wiggle room for your util, so you could see a util drop. 

[RobertEG]

My take on the issue of CLI

Looking at it for the reason creditors grant it, rather than why consumers seek it, they arent doing it to help consumers get lower % util, and thus improve their FICO scores.

They do it because, on the average, consumers tend to establish  the same approx. level of % util as prior to the CLI, thus increasing their debt while evaluation of their credit in granting the CLI shows that the consumer risk does not increase much, if at all.  Mo' debt, mo' interest..... mo' money!

If your primary reason for getting a CLI is FICO score improvement, then that path is predicated upon not using that CLI.

If you can buck human nature, it can improve your overall % util.  It also should help in future manual reviews, indicating to other prospective creditors that at least that current creditor has positively evaluated your ability to successfully manage higher levels of discretionary credit.

Even if a hard pull is needed to get it, that is transatory.  To me, its a matter of not increasing debt.

[my-own-fico]

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RobertEG wrote:

on the average, consumers tend to establish  the same approx. level of % util as prior to the CLI, thus increasing their debt while evaluation of their credit in granting the CLI shows that the consumer risk does not increase much, if at all.  Mo' debt, mo' interest..... mo' money!

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And yet, on average, the income growth in the past thirty years has been zero for the bottom 90% of the population. A probable explanation could be that people expanded their wallets by resorting to stuff like moving the homemaker spouse to the workforce or putting less aside for retirement. When that's no longer enough, I suppose the consumer risk may go up. It has already happened to some extent as the financial crisis has increased credit card issuers' chasing of customers' balances.