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Established Member
MikeRebuild
Posts: 21
Registered: ‎01-30-2013

Total amount of credit?

[ Edited ]

I am trying to increase my credit lines with my existing credit card companies. I've done this a few times, and they have not done credit inquiries. Does anyone who how experian "tiers" the total credit amount? What I mean, does experian raise the FICO score say when you get to a total line of 3000?, 4000?, etc. Is there any scoring like that , that anyone is aware of?


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Valued Contributor
tcbofade
Posts: 2,029
Registered: ‎09-26-2011

Re: Total amount of credit?

Not that I'm aware of.

 

I don't think that they truly score you on your amount of credit, they score you on how much of your available credit you're using.

 

In other words, someone carrying a $10 balance on a $100 card is in much better shape than someone carrying a $999 balance on a $1,000 card.

 

 


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Valued Contributor
p-
Posts: 2,539
Registered: ‎06-05-2008

Re: Total amount of credit?


tcbofade wrote:

Not that I'm aware of.

I don't think that they truly score you on your amount of credit, they score you on how much of your available credit you're using.

In other words, someone carrying a $10 balance on a $100 card is in much better shape than someone carrying a $999 balance on a $1,000 card.


+1

 

Your score is focused more on your history of paying on time and using credit responsibly, not what your total credit might be.  Someone with a 10k a year income and 300 dollars in credit could hit perfect scores with low utilization, while a six-figure earner would score significantly lower if they were carrying a high percentage balance on their cards.

 

Lenders use your score and report to decide whether you are a safe credit risk, i.e. likely to pay your bills based on history.  That detemines approval and interest rate.  Then they use your income to help determine how much to loan you.

 

Getting a limit increase helps your score because it increases the available credit.  If you typically post a 1k balance at statement date, you'll look a lot better if your credit limit is 10k than if it is 3.  If you typically only use a hundred bucks of it, you don't really need the increase to help your score.  Here's a link to some more helpful info:

 

Fico Scoring

  2-13-14: FICO EXP: 779 - EQU: 742 - TRAN: 765 - AVG: 762 - +212 points from JUN 2008 - MY CREDIT JOURNAL

Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Total amount of credit?

Ditto. FICO doesn't care how much credit you have. It only cares how much you use in relation to the credit you have. Now some FAKOs will factor in total CLs.

Established Member
MikeRebuild
Posts: 21
Registered: ‎01-30-2013

Re: Total amount of credit?

i am asking because of three piece of information i picked up:

 

1- when i went to lease my car, they said my credit was "light", meaning i only had a $1700 CL. While they eventually approved me (at a high rate) they suggested i try to boost up my CLI so that my credit would look better. I know the auto industry is not exactly the most honest of all idustries.

 

2- i had a call with the experian credit counselors. he told me "creditors know that a small amount of credit is easier to manage than a large amount, and that you will be looked on more favorabaly if you have a larger CL"

 

3- The monthly experian report says one of my negatives is that my average credit card balance is less than $2000

 

 

i feel like i am in a holding pattern. i had a BK 3 years ago, my credit score was 640. now it is 661 and seems to be stuck. I have a NYS judgement against me that was paid off recently, and a federal tax lien that is still outstanding. Since the BK, i've opened three credit cards and have paid them religiously . i now have a $2200 CL total. i am thinking of opening a secured credit card with Applied Bank to just to boost up my credit line.  any thoughts?

 

 

 

 


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Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Total amount of credit?

1 & 2 - I agree that if two borrowers are compared, both with the same credit history and same reports and same scores, that one would be favored over the other if the one has/had larger credit lines. That's why you see the phrase in here, "higher CLs begat higher CLs". If someone is stuck with starter cards at $200 here or there, it's harder to break through into the thousands in credit, as compared to someone with thousands who would find it very easy to get $1000+ CLs. But none of that has to do with FICO scoring. It's a manual review-thing. I remember starting with one or two CCs at $700 tops in CLs. I tried for a car and they said the same thing. They didn't think that my vast non-experience in credit would be enough to get a low interest loan. However, IMO, dealers are bums and I'd never apply through the dealer again.

 

3- Anything you get from Experian or their many services would not be FICO-related. They don't offer FICO scores. They offer FAKOs and some FAKOs out there do ding you for having lower limit CCs. This is totally opposite to FICO scoring. Per FICO scoring, FICO only cares how much of the CL you use. When I first started in credit I remember seeing a poster in her 60s or so. Her 3 FICO scores were in the 800s, but her combined CLs in CCs were about $1000. She had like a $500, a $300, and $200 or something like that, but it totalled $1000. She could easily get approved for thousands in credit but she didn't want that. She was happy as a clam and enjoyed her lower limit CCs. I always thought that higher limit CCs resulted in higher scores. It's the higher scores and longer history that results in higher limits.

 

IMO, if you are aiming for higher scores, I'd avoid opening any new CCs because your mix of credit is fine. You can easily hit into the 800s with what you have, minus the baddies. For max points pay 2 of those 3 CCs to $0 and get the other to report a balance of under 9% of the CL. Work on the baddies. Not too much you can do with the Bk. The fed lien can go away. Many had success in getting it removed after paying it. Not sure about state; YMMV I guess.

 

Established Member
MikeRebuild
Posts: 21
Registered: ‎01-30-2013

Re: Total amount of credit?

Wow, thanks for posting all that for me. that is a real eye opener. its has spurred some really intereting thoughts, If you wouldn't mind,

 

1-I am confused about the FICO score. when a creditor is looking to give credit, don't they go to the big three to pull my credit? so isn't my goal to try and optimize my scores with the big three? or is there just a generic "FICO" score that a creditor gets from another source? where should i look for my true fico score then?

 

2- I have the car lease established for a year, and i don't think I have seen any change to my score. Do you have any idea how long it will take before i see some change?

 

thanks again for all your help

 

 


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Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Total amount of credit?

1- FICO score isn't everything. Yes, a creditor will pull one, two, or all 3 credit reports along with the FICO score(s), but they look at other factors like income, residency, DTI, past credit experience, job experience, and other items not factored into a FICO score. For example, if you want to lease a car, but have no income, the highest FICO score won't get you that lease. Another example is your past credit experience. It's known in here that Chase CCs will deny you a CC even if you have a super-high FICO. I've been denied with Chase at a 750 FICO. The reason for the denial was because I had a major derog at 6.5 yr old. That was too recent for them to approve. Every creditor has their own standards.

 

2-Per FICO scoring, FICO really doesn't reward you for paying on time. There's little/no benefit for adding a lease. Most usually see a drop in score with gradual increases as the newness of that credit wears off. If it's a year old or approaching that, you might see a small increase at the 1-yr mark. Other than that, you won't notice any increases as it ages even though they'll be tiny ones, though you'll certainly notice it when it drops 10 yrs after paying it off assuming it remains older than AAoA.

Established Member
MikeRebuild
Posts: 21
Registered: ‎01-30-2013

Re: Total amount of credit?

Thanks again for all this help. I guess what I am hearing from all this is to just be patient? and the longer the time passes, the less the derogs will effect me, and the more i continue to pay on time, the better it will get? I think thats the long/short of it....


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Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Total amount of credit?

Time heals it. And again take action on the liens at least.


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