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Valued Member
Posts: 48
Registered: ‎12-18-2014

Credit Limit Increase. Will score go up?

I just received a huge credit limit increase on a card I don't use very much (like once every few months).  Didn't ask for it but company just did it.  Will this help my score, since my overall utilizaiton amongst all my cards will go down? Or will there be no change as the utilization on this particular card tends to be 0%? 

 

 

 

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Valued Contributor
Posts: 2,450
Registered: ‎08-25-2016

Re: Credit Limit Increase. Will score go up?

If it lowers your utilization below a threshold then you should see an increase.
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Senior Contributor
Posts: 4,912
Registered: ‎07-17-2014

Re: Credit Limit Increase. Will score go up?

Total utilization counts all credit limits combined.  Therefore, since your total CL will go up, your total util will go down.  (Possible exception: if your card's CL is raised to an absolutely stratospheric height, some FICO models will drop it completely from total credit limit.  For older models it was > 35k, for later models it might be 50k or higher.)

 

Just because utilization goes down, however, that won't necessarily help your score.  The utilization has to cross some critical breakpoint.  People seem to think 29% is such a breakpoint, for example.  So it your util went from 30.2% to 28.7%, you'd get a boost.  But if it went from 28.7% to 22%, you'd get no benefit.  A well studied breakpoint is 9%.  Thus going from 9.1% to 8.9% is expected to give you a boost.

 

Note that regardless of what your total credit limit is, you can always create a low utilization by paying down your debt.  Therefore, any time you find yourself thanking the gods because of a CLI (this will help me with my util) then that strongly implies you are carrying CC debt and you should think twice about how and why that is happening.  Almost ant time you are paying interest to CC companies that's a bad financial move.

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Registered: ‎07-17-2014
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Re: Credit Limit Increase. Will score go up?

PS.  Aside from changing your utilization, getting bigger credit limits will have zero effect on your FICO score.

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Posts: 7,087
Registered: ‎04-11-2016
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Re: Credit Limit Increase. Will score go up?


smile90000 wrote:

I just received a huge credit limit increase on a card I don't use very much (like once every few months).  Didn't ask for it but company just did it.  Will this help my score, since my overall utilizaiton amongst all my cards will go down? Or will there be no change as the utilization on this particular card tends to be 0%? 

 

 

 


If you list your current credit cards with their balances and limits along with the previous limit and new limit on the card you got a CLI on, we'll be able to tell you pretty quickly if you'll see any scoring benefit from the CLI based on your utilization drop.

Valued Member
Posts: 48
Registered: ‎12-18-2014
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Re: Credit Limit Increase. Will score go up?

Here are my numbers

 

Card #1 Credit Limit: 10,000 - Balance 0 (I use this card the most but pay it off every month)

Card #2 Credit Limit: 13,500 - Balance 3100 (0% interest for next 18 months)

Card #3 Old Credit Limit: 7,200, New Credit Limit: 11,000  - Balance 0 (I use this card maybe once every 3 months and immediately pay it off). 

 

Thanks!

Senior Contributor
Posts: 7,087
Registered: ‎04-11-2016
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Re: Credit Limit Increase. Will score go up?

[ Edited ]

smile90000 wrote:

Here are my numbers

 

Card #1 Credit Limit: 10,000 - Balance 0 (I use this card the most but pay it off every month)

Card #2 Credit Limit: 13,500 - Balance 3100 (0% interest for next 18 months)

Card #3 Old Credit Limit: 7,200, New Credit Limit: 11,000  - Balance 0 (I use this card maybe once every 3 months and immediately pay it off). 

 

Thanks!


So you went from $3100/$30,700 (11% aggregate utilization) to $3100/$34,500 (8.xx% aggregate utilization).  Your are just below 9%, so in theory unless interest takes you above 9% your scores should increase.  How much is difficult to say.  I'd guess about 8-13 points.  You are extremely close though to the threshold point, so paying down another $100-$200 on the card if you are able to will ensure that you are clearly across that threshold and will keep you there even if a little bit of interest is added to your balance.

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Posts: 312
Registered: ‎06-21-2017
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Re: Credit Limit Increase. Will score go up?


CreditGuyInDixie wrote:

Total utilization counts all credit limits combined.  Therefore, since your total CL will go up, your total util will go down.  (Possible exception: if your card's CL is raised to an absolutely stratospheric height, some FICO models will drop it completely from total credit limit.  For older models it was > 35k, for later models it might be 50k or higher.)

 

Just because utilization goes down, however, that won't necessarily help your score.  The utilization has to cross some critical breakpoint.  People seem to think 29% is such a breakpoint, for example.  So it your util went from 30.2% to 28.7%, you'd get a boost.  But if it went from 28.7% to 22%, you'd get no benefit.  A well studied breakpoint is 9%.  Thus going from 9.1% to 8.9% is expected to give you a boost.

 

Note that regardless of what your total credit limit is, you can always create a low utilization by paying down your debt.  Therefore, any time you find yourself thanking the gods because of a CLI (this will help me with my util) then that strongly implies you are carrying CC debt and you should think twice about how and why that is happening.  Almost ant time you are paying interest to CC companies that's a bad financial move.


I wouldn't necessarly say that person is carrying debt.  Some people do the float and pay it in full when it is due (guess you could say this is carrying debt).  I pay in full each month by the due date.



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Senior Contributor
Posts: 7,087
Registered: ‎04-11-2016
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Re: Credit Limit Increase. Will score go up?

While the above may be true to some degree, such a person would not be impacted scoring wise by the utilization changes associated with that behavior unless their total credit limits were ridiculously low, thus making the reported balances "high" relative to those very low limits.  The only other way it could really ever present a problem is if this same person had a spend that was ridiculously high (relative to their low limits) and such behavior would almost certainly stimulate an auto-CLI rather quickly, thus making this "problem" self-correcting.

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Senior Contributor
Posts: 4,912
Registered: ‎07-17-2014

Re: Credit Limit Increase. Will score go up?


VoltaicShock wrote:

CreditGuyInDixie wrote:

Total utilization counts all credit limits combined.  Therefore, since your total CL will go up, your total util will go down.  (Possible exception: if your card's CL is raised to an absolutely stratospheric height, some FICO models will drop it completely from total credit limit.  For older models it was > 35k, for later models it might be 50k or higher.)

 

Just because utilization goes down, however, that won't necessarily help your score.  The utilization has to cross some critical breakpoint.  People seem to think 29% is such a breakpoint, for example.  So it your util went from 30.2% to 28.7%, you'd get a boost.  But if it went from 28.7% to 22%, you'd get no benefit.  A well studied breakpoint is 9%.  Thus going from 9.1% to 8.9% is expected to give you a boost.

 

Note that regardless of what your total credit limit is, you can always create a low utilization by paying down your debt.  Therefore, any time you find yourself thanking the gods because of a CLI (this will help me with my util) then that strongly implies you are carrying CC debt and you should think twice about how and why that is happening.  Almost ant time you are paying interest to CC companies that's a bad financial move.


I wouldn't necessarly say that person is carrying debt.  Some people do the float and pay it in full when it is due (guess you could say this is carrying debt).  I pay in full each month by the due date.


It's not certain (i.e. necessarily the case) that such a person is carrying debt.  But it strongly suggests it.  A person for whom a CLI is his chief or only way of lowering his CC utilization strongly suggests that he cannot pay his bill in full.  If he could then he wouldn't say that the CLI is going to be a huge help.  He'd know that he could control his utilization any time he wanted by paying down his debt.

 

Like you, I use my cards naturally and just pay the statement balance each month.  And of course, our OP may also always pay his cards in full each month.  If so, then he'll know what I said doesn't apply to him.  Generally, however, when I hear people talk about a CLI helping their score by substantially lowering their utilization, it means they are not paying in full.

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