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hello ,
recently i have requested for credit line increase for all my cards which increased my overall credti limit from 15000 to 23000 and my balance is 7000 since my utilization ratio is low now after increasing the limit will my score improves now
@Anonymous wrote:
You utilization has dropped from 47% to 31%. There are many FICO score models. Some weigh utilization more than others. Lower overall utilization generally improves FICO scores. Keep in mind that there us overall utilization and then there is utilization for individual credit lines. Keeping these numbers below 30% is where FICO models do not penalize. Going lower rewards you with additional points.
Target range for UTL is 1-9% based on the experiences of many people on this forum. I can say from experience that a score can be dropped with with UTL lower than 30%. Not sure where "keeping these numbers below 30% is wehre FICO modles do not penalize" came from but I can say it is not true in my case.
@Anonymous wrote:hello ,
recently i have requested for credit line increase for all my cards which increased my overall credti limit from 15000 to 23000 and my balance is 7000 since my utilization ratio is low now after increasing the limit will my score improves now
Yes it helped your score to increase your credit limits.
But you should try to make sure all your accounts are < 30%.
And then try to get below 10%.
As SJ and others are saying, when your utilization goes down that improves your score. (Assuming a person's total utilization was > 8.9% to begin with.)
But there's a far better way to lower your utilization. It's called Paying Down Your Debt. When a person has a lot of CC debt, that means he is paying high rates of interest (in almost all cases). If he is paying high rates of interest, that means he is saving no money (since if he had money after each paycheck he'd be paying off his debt).
Being in a position where you are saving no money is a dangerous place to be. While there's nothing wrong with asking for CLIs, asking your creditors to give you the ability to go deeper into debt is not the best way to solve the problem of high interest debt. The best way, boring and unsexy as it doubtless sounds, is to pay it all off.
I mention this just so it's clear that high CLs do not in themselves raise your score. It's the low U that will raise your score, and a college student with a $300 credit limit can spend a lot on his one card and and still have a 4% utilization.
@Anonymous wrote:hello ,
recently i have requested for credit line increase for all my cards which increased my overall credti limit from 15000 to 23000 and my balance is 7000 since my utilization ratio is low now after increasing the limit will my score improves now
Actually, your new aggregate utilization of $7k/$23k = 30% is by no means low. It is still rather high. To avoid score penalties associated with aggregate utilization you want AG UT < 9%. I would suggest paying down your balances to $2k to get there.
Generally, I advise keeping utilization on a per card basis under 30% and under 9% for all cards combined. Aggregate utilization carries more weight in scoring models.