Optimal Total CL for FICO Scoring

[ckinninger]

Hello,

I don't see any info on the TOTAL CL in the high acheivers info.  I'd appreciate any help.

I have 7 accounts on my CR (3 open cc, 1 is an autoloan paid off in 2005, 3 closed cc).

Because of a BofA signature card my total credit limits being reported is only $48,000. The BofA Sig has a limit of $40,000. I am considering product changing to a BofA non signature card to raise my total limit to the full $88,000 that should be there.

My utilization is normally between $0-$700. I have 780 EQ FICO but want to raise it higher.  It just jumped 20 points from 760 but I don't know why yet.  Waiting for a new monitoring service to go live for me.

Does anyone know what the optimal total credit limit is for FICO scoring?

Thanks

[MarineVietVet]

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@ckinninger wrote:

Hello,

I don't see any info on the TOTAL CL in the high acheivers info.  I'd appreciate any help.

I have 7 accounts on my CR (3 open cc, 1 is an autoloan paid off in 2005, 3 closed cc).

Because of a BofA signature card my total credit limits being reported is only $48,000. The BofA Sig has a limit of $40,000. I am considering product changing to a BofA non signature card to raise my total limit to the full $88,000 that should be there.

My utilization is normally between $0-$700. I have 780 EQ FICO but want to raise it higher.  It just jumped 20 points from 760 but I don't know why yet.  Waiting for a new monitoring service to go live for me.

Does anyone know what the optimal total credit limit is for FICO scoring?

Thanks

---

You won't find that information because CL's aren't factored into scoring. It's the responsible management of whatever CL's you happen to have that is scored.

I believe the average of utilization for High Achievers is 7%.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[ckinninger]

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@MarineVietVet wrote:

You won't find that information because CL's aren't factored into scoring. It's the responsible management of whatever CL's you happen to have that is scored.

I believe the average of utilization for High Achievers is 7%.

---

MVV:  I see.  So if I boost my total CL then that will really only help my utilization percentage.  Say I slip and don't pay off a big charge ahead of the statment release date, the higher total credit limit would come in handy?  If my Total CL's is $48,000 and I make sure my statement balances don't exceed $480, then my utilization won't be higher than 1% which helps my score?  Is there any difference in the boost of 1% utilization and 2%?  Or 0%?  

I really appreciate the help and this forum.

[vanillabean]

Credit limits higher than ~$30,000 aren't used in TU FICO utilization; it's ~$50,000 for EQ and EX. As such, $88,000 would equal no util for any of the CRAs, while the optimal credit limit per card would be less than $30K.

[ckinninger]

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@Anonymous-own-fico wrote:

Credit limits higher than ~$30,000 aren't used in TU FICO utilization; it's ~$50,000 for EQ and EX. As such, $88,000 would equal no util for any of the CRAs,

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I'm sorry I am not clear on the above besides the fact that there is something important for me to learn.  $30K max total CL for TU?  Or on any particular acount?  For me $88K would be my total CL if I change from a sig to a regular visa.

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@Anonymous-own-fico wrote:

while the optimal credit limit per card would be less than $30K.

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The above probably answers my previous question.  It would be better for me to have 3 cards at $30K rather than 2 at $40K.  The full $90K would be considered in utilization right?

[vanillabean]

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@ckinninger wrote:

It would be better for me to have 3 cards at $30K rather than 2 at $40K.  The full $90K would be considered in utilization right?

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That's right. The cutoffs are per card, while the total is unlimited. I'd probably go for a credit limit of something like $28K per card to be on the safe side.

You can read more about it here. Interesting stuff.

[MarineVietVet]

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@ckinninger wrote:

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@MarineVietVet wrote:

You won't find that information because CL's aren't factored into scoring. It's the responsible management of whatever CL's you happen to have that is scored.

I believe the average of utilization for High Achievers is 7%.

---

MVV:  I see.  So if I boost my total CL then that will really only help my utilization percentage.  Say I slip and don't pay off a big charge ahead of the statment release date, the higher total credit limit would come in handy?  If my Total CL's is $48,000 and I make sure my statement balances don't exceed $480, then my utilization won't be higher than 1% which helps my score?  Is there any difference in the boost of 1% utilization and 2%?  Or 0%?  

I really appreciate the help and this forum.

---

Everyone's situation is different and there is no one size fits all approach to this but what seems to work well for most people is to have only one of their cards report a small (<9% of it's credit limit) balance each month and then pay in full before the due date. You can use it as much as you want during the month but what's important is the reported balance because for most cards whatever is reported on the monthly statement is what is used to calculate utilization for the month.

You might have to play around with the percentages for a few months to see what works best for you. Some people say that 1-3% utilization helps the most. For others it might be 5-9%. As I said it's not one size fits all.

On any other cards always try and have them report a zero balance each month. That doesn't mean you can't use them just make sure that the desired zero balance on these accounts is achieved several days before their statements post.

Along with individual and overall utilization, FICO also scores the number of all types of accounts reporting a balance.at any one time Making sure less than half of all your accounts report a balance helps most people.

Now this approach really isn't necessary if you're not looking to apply for any credit in the near future or unless you are trying to tweak your score for maximum effect but some folks do this as a hobby just to see how high they can get their score.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[ckinninger]

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@MarineVietVet wrote:

---

Everyone's situation is different and there is no one size fits all approach to this but what seems to work well for most people is to have only one of their cards report a small (<9% of it's credit limit) balance each month and then pay in full before the due date. You can use it as much as you want during the month but what's important is the reported balance because for most cards whatever is reported on the monthly statement is what is used to calculate utilization for the month.

You might have to play around with the percentages for a few months to see what works best for you. Some people say that 1-3% utilization helps the most. For others it might be 5-9%. As I said it's not one size fits all.

On any other cards always try and have them report a zero balance each month. That doesn't mean you can't use them just make sure that the desired zero balance on these accounts is achieved several days before their statements post.

Along with individual and overall utilization, FICO also scores the number of all types of accounts reporting a balance.at any one time Making sure less than half of all your accounts report a balance helps most people.

Now this approach really isn't necessary if you're not looking to apply for any credit in the near future or unless you are trying to tweak your score for maximum effect but some folks do this as a hobby just to see how high they can get their score.

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Ok.  I appreciate all the good strategic information.  It's interesting how keeping a small balance on just the one card helps.  For me, with only 3 open accounts, it also means that if I have more than one without a zero balance then I'm also out of the running for the scoring benefit of keeping most with a zero.  So I am going to concentrate on keeping a low (<9%) on one card.  Within that number I will maintain my total utilization which you say would be helpful at 1-3% or 5-9%.  

Thank you kindly.

[Anonymous]

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@Anonymous-own-fico wrote:

Credit limits higher than ~$30,000 aren't used in TU FICO utilization; it's ~$50,000 for EQ and EX.

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So what happens to util ratio for that CC that has a CL above $30,000. For e.g. Say I have a CC with a CL of $31,000 and charge $3,100 per month on it, so will this $3,100 be counted in util ratio calculation? Or we are in same position as visa sig cards where CL is not reported but util is taken into consideration which significantly affects certain users at times.

[ckinninger]

According to the link/thread posted by my-own-fico:

"You can read more about it here. Interesting stuff."

Without looking for the quote, I understand that the utilization and limits won't be factored for those cards.

FYI I did a PC on my BofA Alaska Sig and lowered limit to 28k. They had another (unadvertised) Alaska Platinum so I went for that. I also lowered my Citi TY Premier to CL 28K. Both were 40K before.