Requesting higher credit line to offset Debt-To-Credit Ratio?

[Anonymous]

I have a couple of questions pertaining to this.  For about 3 years i had no credit cards.  My score hovered around 720 to 740 (the fakos anyway).   One of the things that some of the credit monitoring site stated affected my credit was that i didn't have any revolving credit.  So, i applied for the American Express (with a 10K limit/line) and Bamm!, the hard check hit me for about -10 pts or so.   That's ok.

However, now that i had the credit card, although  did not use it much, i did recently need to for an event and pretty much maxed it out.  As a result $9K was showed for one month as the balance...a very high debt-to-credit ratio (in fact i initially exceeded my limit at 11K, but when i realized that i immediately paid 2K).  I have since paid the balance off.

My questions are:

1.  If i exceed my limit, but paid before the credit card reported it to the agencies, does it show or affect my credit?

2.  Some agencies show a "highest balance" entry on their report.  For me it is showing as 9K even though the balance is now 0.  Does that entry affect my credit?

3. If i had taken 5 months to pay off the balance vs say 2 months, in the end now that the balance is zero, does the length you take to pay off affect credit in anyway? or does fico only care about the fact that your debt to credit ratio is now low?

4. I am thinking of asking Amex to bump up my limit significantly. The reason for this is that in case i have to carry a month to month balance again, i'd like it to show as a lower debt to credit ratio.  Is this viable a  strategy? 

5. Does having a high credit line/limit affect your credit, even if it is not used?

thanks much

[haulingthescoreup]

What kind of American Express card is it?

[Anonymous]

the American Costco card

[marty56]

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@Anonymous wrote:

I have a couple of questions pertaining to this.  For about 3 years i had no credit cards.  My score hovered around 720 to 740 (the fakos anyway).   One of the things that some of the credit monitoring site stated affected my credit was that i didn't have any revolving credit.  So, i applied for the American Express (with a 10K limit/line) and Bamm!, the hard check hit me for about -10 pts or so.   That's ok.

However, now that i had the credit card, although  did not use it much, i did recently need to for an event and pretty much maxed it out.  As a result $9K was showed for one month as the balance...a very high debt-to-credit ratio (in fact i initially exceeded my limit at 11K, but when i realized that i immediately paid 2K).  I have since paid the balance off.

My questions are:

1.  If i exceed my limit, but paid before the credit card reported it to the agencies, does it show or affect my credit?

May show on highest balance, zero effect on your FICO score

2.  Some agencies show a "highest balance" entry on their report.  For me it is showing as 9K even though the balance is now 0.  Does that entry affect my credit?

No

3. If i had taken 5 months to pay off the balance vs say 2 months, in the end now that the balance is zero, does the length you take to pay off affect credit in anyway? or does fico only care about the fact that your debt to credit ratio is now low?

Other than the reported util, paying over time has no effect on your score, unless it's late

4. I am thinking of asking Amex to bump up my limit significantly. The reason for this is that in case i have to carry a month to month balance again, i'd like it to show as a lower debt to credit ratio.  Is this viable a  strategy? 

IMHO short term maybe, long term no.

5. Does having a high credit line/limit affect your credit, even if it is not used?

Only in util calculation.

thanks much

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[RobertEG]

Exceeding your CL on an account can have very different impacts,'

Forget, for a moment, anything to do with FICO scoring, and consider only the repurcussions with the OC,

This is a violation of your account terms of agreenebt with them.  It opens their door to assessing late fees, increasing your APR, decreasing your credit limit, or even closing the account.

Going over limit, when it is narrrowed down to only credt reporting, reqyures that before reporting to a CRA, that the account not be just be delinquent in meeting terms of a prior monthly billing statement, but additionally that it has progressed from over 30-days from the billing due date.

If you paid within a month after its billing due date, that is not a reportable 30-day late to a CRA,

[Anonymous]

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@Anonymous wrote:

4. I am thinking of asking Amex to bump up my limit significantly. The reason for this is that in case i have to carry a month to month balance again, i'd like it to show as a lower debt to credit ratio.  Is this viable a  strategy? 

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AmEx does not really like their customers to carry a balance from month to month. Doing so is likely to raise a flag, and result in a future CLD or worse ...

[Anonymous]

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AmEx does not really like their customers to carry a balance from month to month. Doing so is likely to raise a flag, and result in a future CLD or worse ...

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that hasn't been my experience with an AmEx SkyMiles credit card.  I assume the OPs AmEx Costco Card is a credit card as well.  Prior to getting my finances in order I carried a 12k balance for years!  During this time they kept raising my CL till it was up to $18k...where it is now.  Never had a decrease in CL.  I suppose they thought they were making a ton of money off me and if i was stupid enough to put more on it they'd make that much more.  Anyway my balance is now $0... whew. cheers.

[Anonymous]

Thanks for all the replies...and thanks Marty for paving the way

i've gone ahead and requested the higher limit, let's see what comes of it.  I'm probably thinking i should have left well enough alone, because i checked today and my scores are ranging between 766 to 780, quite a jump from a 1.5 months ago when i last checked.  Part of this was because i immediately paid off the AmEx when i discovered it's impact (my Equifax had dipped to 699 for instance), and soon after initiated disputes on-line with all three agencies to update their records.  This took less than two weeks, where as if had to wait for AmEx to notify the agencies, it would have taken well over a month - i say this because shortly after paying the AmEx off, AmEx reported to the agencies as they normally do, but reported the previous month balance, not the update-to-date zero balance.

Anyway, thanks again - next task, now that i have my score back up to where i want it, is to use this opportunity to investigate refinancing my existing mortgage to a lower rate.