Raising Credit Limits?

[Anonymous]

Hello everyone!  I have a credit card with a $2,600 limit and they are offering to raise limit to $4,400 without pulling credit - they said I am already aproved for this amount from a routine exam of my credit they did.  Is there an ideal limit to have when considering such situations?  I heard that some mortgage lenders will require 3 tradelines of $3,000 limits or higher - is this true and accurate?  Are there any negative effects - as in how lenders will count a percentage of credit limit when calculating your debt ratio?

Also, my wife needs to establish more credit.  I have had this card for 10 yrs with perfect pay history.  I read that AUs no longer benefit from being on the account & I am curious if adding her is a good idea in helping her establish credit or whether she should get another card?  Will they still pull her credit to become a joint holder on my account?  What is best option?  Also, I was wondering if any of the experts out there would be interested in giving detailed advice on how to improve our credit?

Thanks in advance

[haulingthescoreup]

Hi, welcome to the forums.

IMO, there is no reason whatsoever to decline a CLI (credit limit increase), except for those who are afraid that they will be tempted to abuse it.

For the rest, please read at least the first post on Credit Scoring 101, which is linked in my siggy below. You're attempting to drink from a fire hydrant, without some of the basics of credit under your belt. Along with Credit Scoring 101, you should also check out the PDF MyFICO credit education booklet, also linked.

Once you read both of those, and you're even more confused than now , please come back and you'll know the specific questions to post.


edit to add: FICO 08 was going to eliminate AU accounts from scoring. This has now been changed --they will use them, but they are going to try to establish that there is a real relationship between the card holder and the AU. Additionally, only EX is using FICO 08, and that on a limited basis. For now, AU accounts carry their full oomph.

Message Edited by haulingthescoreup on 10-17-2008 05:36 PM

[smallfry]

Take the increase. No joint accounts but an AU is fine. Once the card reports on her credit report she should be able to pick up a couple of cards in her own name to start establishing credit history. I assume she has none? Capital One and Orchard are decent choices avoid the CJ and the other flat out junk. To round it out she might apply for Walmart or Target. Walmart might be more likely to give her a decent starting limit though.

[Anonymous]

Would you mind expanding on the specifics of the current status of AUs?  and what is the outlook for this staying this way?  Because if I'm understanding correctly your previous post then I should add her as an AU.

Also, how exactly do AUs work - will she get my full 10 yr history added on to her credit therefore boosting her credit instantly?

Thanks again

[haulingthescoreup]

---

RunningToWin wrote:

Would you mind expanding on the specifics of the current status of AUs?  and what is the outlook for this staying this way?  Because if I'm understanding correctly your previous post then I should add her as an AU.

Also, how exactly do AUs work - will she get my full 10 yr history added on to her credit therefore boosting her credit instantly?

Thanks again

---

Originally, FICO 08 was not going to consider AU cards in scoring. (There would still be AU accounts, they just wouldn't be factored in.)

This has been modified, and AU accounts will still be scored, but apparently they're going to try to establish the legitimacy of these. In other words, they're going to try to screen out the purchasing of strangers' accounts.

And as far as I know, EX is the only bureau even starting to offer FICO 08. And I don't know how many lenders have switched to it. My guess would be not many for now, as they're more jittery than ever.

So that being said, yes, that's how an AU account works. Once the card company reports the account to your wife's credit, the card will pop up as if it had been there all along, the age, the history (goodies vs baddies), the util, the credit limit, everything. So the ideal card to go AU on has these features:

- It's older than the average age of accounts (AAoA) of the AU

- It's squeaky clean, or at most, one 30 that is pretty old

- It has how util, and the cardholder typically doesn't use it much

- It actually does report AU's.

This last isn't a joke --not all cards report AU's. Off the top of my head, PenFed doesn't, and Gap doesn't.

[Anonymous]

Thanks again for your response!  The card will have a %57 util if I take the CLI and it is not used much.  I hate this and we are going to pay it off asap but it had to be used for an emergency.  That being said, should I still add her as an AU?  Also, I'm going to call the ccc to make sure because the csr I spoke with the other day wasn't sure if it actually reported AUs.  It is a Citi Diamond Preferred Rewards card - does anybody know if they report AUs?

[haulingthescoreup]

I think I'd hold off until you had it paid down/ off. I suppose it wouldn't actually hurt, if she isn't needing a better score immediately. But unless she needs to jump in this right away, I'd at least wait until the util on the card was under 20% (the lower the better.)

I * think * Citi reports AU's, but I'm going to step aside on that for others with better knowledge.

One thing that you will find out about CSR's is that those like the one you spoke to --who will actually admit that they don't know for sure --are awfully rare! It's a lot more common for them to state with complete and utter conviction whatever pops into their heads.

[smallfry]

If you have the same listed address Citi will report. For some strange reason I could not get my children listed as AU on any of my cards because the addresses did not match. My SO with a different last name but the same address was listed on all of my cards Citi Chase on all 3 bureaus but TU refused to list her as an AU on Walmart. I agree with Hauling that utilization won't help much except for history. 

[Anonymous]

So even though the util is where it is would you recommend doing it for the history? 

Also, are there any tricks to getting them to raising the limit even higher without an inquiry?

thanks again everyone