Understanding FICO® Scoring

[noni]

My husband and I want to move into a bigger house this year. We've been trying to clean up our credit reports and despite my bankruptcy in 2005 my scores are 647 to 670. My husband's are better than mine but not over 720.

We're looking at houses now and hoping to shop a mortgage in May or June. Yesterday we got notice from a credit card that they raised our limit another $3,000 so we're now over $8,000. That's a great thing for utilization percentages, since we don't use the card much.

I am curious, how soon will the higher limit factor into our scores? Will it make any difference between now and June?

[Brammy]

Depends on what your current utilization is before and after.  If you're alreay under 10% it won't make that big of a difference.  However if you are at 30 and it brings you down to 10 you could see a good jump if you are over 40 and it brings you under 30, the jump could be bigger. Over 40 starts deducting points.

[yoreljm]

The inquiry and the new account may taken off points. The fact that you increased your limit may work for you because it decreased % of used credit. But it may also hurt you because you have an increased potential of going into debt (if you decide to go on a spending spree).Basically, the effect of certain changes on your credit depends on what was on your credit from before the chnge. The same action can benefit or hurt you.

[noni]

I have a question about the inquiry. We did not request the increase. The credit card company just notified us that they raised our limit. I can see how inquiries are a bad thing, but what if we have no control over them?

Also our utilization is under 20% and should be down to near zero in two months. I am curious how the scores will change after the fact.

[Brammy]

---

noni wrote:
I have a question about the inquiry. We did not request the increase. The credit card company just notified us that they raised our limit. I can see how inquiries are a bad thing, but what if we have no control over them?

Also our utilization is under 20% and should be down to near zero in two months. I am curious how the scores will change after the fact.

---

I would have said your score would probably increase but due to a recent alert on my file after one card reporting zero balance, after a small 32.00 balance, I received a notice of a 3 point drop in score.  Nothing else chagned except maybe the anniversary month that my BK was discharged.  This could weigh into it since FICO has several different scoring ranges assigned.  I have even heard of a bankruptcy falling off and a major score decrease because you are no longer rated among people who have a BK on file. 

In other words, the affects would be anyone's guess.