09-23-2012 06:09 AM
It depends. It depends on whether or not your individual and overall util improves as a result of this CLI and depends on the amount of that change, if any at all. For example, if your reported balance is $0, and the CL is at $201, then your utilization is at 0%. Increasing the limit to $500 would still mean a utilization of 0% and your score won't change. However, if your reported balance was $201, for example, then your utilization is at 100%. If you aren't paying off your balance, then increasing the limit to $500 would drop the utilization to 40% vs. 100%. You could very well see an increase, but that depends on the change to your overall util which factors in other CCs, certain HELOCs and LOCs, and includes some CC COs.
09-23-2012 10:52 AM
Welcome to the forums!
Are you just starting out with credit?
Do you have any other credit currently?
Where did you get that 720 score?
09-23-2012 02:29 PM
The sooner you get 3 credit cards the better. It has become generally accepted on these forums that 3 credit cards are needed to maximize your scores. That score from Experian.com is a FAKO not a FICO. It has no bearing on what your actual score, pulled by a lender would be. My FICO (This website) is the only place to purchase an accurate score. You can only purchase an Equifax or TransUnion score here. Experian scores are not available for consumers to purchase anywhere.
Your problem, and the problem you will have for the next few years, is that you have what we call a "thin file". That is little to no credit history. The sooner you get more credit the better.
My suggestion to you is as follows:
Apply for a Walmart credir card today. As long as you don't have any negative information on your report you should be approved. When you sign up for electronic billing you will get a TU08 FICO score for free. Don't worry if they start you out with a small credit line, they are very generous with credit line increases.
Having 2 cards reporting will be much better for building your scores and history.
Once you have these cards reporting for 6 months you will be ready to get another card.
09-26-2012 06:39 PM
I was approved for a Walmart card (soft EQ hit, Fico score 638) with some negatives, 5 30 day auto lates in last two years, 1 collection 2007, approx 82% util, with two cards 90+, AAofA on other accounts was 4+ years though. Just an FYI.
09-26-2012 11:15 PM
Yes. what increases your score is the "utilization" ratio. this means your (card balance / credit limit).
card balance 25 125
------------------ ---- = 12.5% ----- = 31.0%
credit limit 200 500
Rule of thumb is keep the utilization below 9% of your card balance and pay it in full every month. That means $500 * 9% = $45/month. If you use the card the "traditional" way that means charge $45, put the card in the freezer so you won't use it, then pay the card balance when the bill comes. Then re-use the next month. However, the volume, from the bank perspective, assuming I am correct, shows a volume usage of $45 * 12 = $540/year. FYI, your credit may only go up 1-3 points every month but if it is going up, regardless of the amount, you are making the right decisions.
For myself, if I understand correctly, their "hidden" algorithm, this is under the "character" category of the 3 C's of credit. means show them you can handle the volume of the credit line you desire. If that means making multiple payments to accomplish the credit limit you want, then so be it. When I started, I paid every week. this means my volume was $200 x 4 = $800 a month volume and paid in full every month, just in 4 equal payments. When you first open your card, this technique will not work because they hold payment for a two (2) week period until they get confirmation the payment has cleared. After a 6 month period, they finally quit arguing with me accepted that i never bounce and my credit limit hold is posted back to the account the next day. What I did was to charge to the credit limit every week, pay it 3 days later after the charge went from pending to posted plus i increased my line an average of $300/month to the savings account and increased my usage and paid it off every week.
Review period for "unsecured" credit -- i wouldn't advise calling them just demonstrate that can handle the credit line you want.
The second category is called "capital." In the present day where people are laid off, etc., banks are nervous. That means show them you can "save".... save at least $100 to increase your line of credit AND I recommend save $100 to a seperate savings account for rainy day expenditures. this way you never get caught with a large payment or missing a payment which is even worse.
Basically, my strategy is to rally people to save $100/month in the CD account. When they give or authorize you an "unsecured card", then roll that over to a $5,000 CD with capital one and continue the $100/month savings. If my research and theory are correct, keep that behavior up -- pay in full every month, 9% utilization, and savings $200 a month between the CD and rainy day fund, and they will increase your credit line. ($100x12 months) x 5 years (using capital one's definition of average credit level) is $6,000 in the bank. with these assets, $5,000 in CD and $1,000 for backup payments, you will transition to the nice "unsecured" cards rather quickly plus of course cleaning up any "other" bad credit you may have.
I am at the $3,000 credit level, 10 months into the card, and have acquired $450 total unsecured credit. i will post the results when i get my annual review to see if I am right about what capital one decides to do plus the letter i sent them.
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