Low Credit Limits on Accounts

Ryan2151 · ‎10-22-2009

Upon reviewing the "What Factors lower your PLUS Score" section of my Equifax report, I found something new (on my report)

"Having low credit limits on your accounts and loans counts negatively against your credit score. Having a high amount of credit is a positive factor because it indicates to lenders that other creditors have trusted you by lending you money in the past. However, since your major credit card limits are generally low, lenders may think you dont have enough experience with high limits."

This one brings up all sorts of questions:

1. Is this an example of a nit-picky notation that you will see when you score gets to above-average levels?

2. If your "low limit" accounts happen to be your oldest accounts, how is this fair? Obviously, when you start out, creditors are only going to give you small limits, this is a fact and something that is no fault of yours!

3. How can these accounts hurt you when they are open for longer, with perfect payment history!?

4. Would it be worth it to contact these creditors and apply for higher limits? It's tough getting anything out there these days and I'm hesitant to bother with the inquiry as these seem to carry some extra weight these days.

Thanks in advance!

llecs · ‎10-22-2009

IMO, ignore PLUS score advice. Low CLs do not impact your FICO score. High utilization does.

I once saw someone post with a pristine history of 30+ years and had over a 800 FICO score. Her total CLs equaled about $1000. Each CC limit was $400 or less. She was a happy camper and didn't want anymore credit.

Anonymous · ‎10-23-2009

@llecs wrote:
IMO, ignore PLUS score advice. Low CLs do not impact your FICO score. High utilization does.

I once saw someone post with a pristine history of 30+ years and had over a 800 FICO score. Her total CLs equaled about $1000. Each CC limit was $400 or less. She was a happy camper and didn't want anymore credit.

+1.

Pull your scores at myfico and follow the advice here - it will help you know how to increase your FICO scores. (And you will never see a negative comment about low credit limits on your cards on a FICO report). That is strictly FAKO advice - and worthless (at best) to the FICO score world. Plus scores, by the by, do not align in any way with FICO scores - they can be wildly off.

I pull CCT daily and totally (and I mean totally) ignore the plus scores there and the recommendations - they can actually be quite damaging.

DH's EQ FICO came in at 802 with only 1 cc reporting - it had a $500 CL.

RobertEG · ‎10-24-2009

Credit limits are not, per se, a part of FICO scoring, They score only the % util of that CL, on each card, and overall, and the number of cards reporting balances.

To even infer that you request a CL reduction is absurd,

Message Edited by RobertEG on 10-24-2009 11:02 PM

Message Edited by RobertEG on 10-24-2009 11:08 PM