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Frequent Contributor
Posts: 324
Registered: ‎11-18-2007
0

rebuilding history

i'm trying to rebuild my credit. i already have a hsbc secured card with a $500 limit.  I only have 1 positive tl, other than my student loans which are not yet back in repayment.  i'm trying to have 3 positive tl. i would like to get secured cards with boa and citi.  these are all mainly to build a positive tl history, and i don't really plan to use them, and to keep the util around 1-9% as advised here.  my question is, given this scenario, credit scoring wise, would it matter rather i had a $500 or $5000 credit line, if i'll only be using it sparingly to keep it active, and build a positive history?
Moderator Emeritus
Posts: 7,970
Registered: ‎12-19-2007
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Re: rebuilding history



angiepharm wrote:
i'm trying to rebuild my credit. i already have a hsbc secured card with a $500 limit.  I only have 1 positive tl, other than my student loans which are not yet back in repayment.  i'm trying to have 3 positive tl. i would like to get secured cards with boa and citi.  these are all mainly to build a positive tl history, and i don't really plan to use them, and to keep the util around 1-9% as advised here.  my question is, given this scenario, credit scoring wise, would it matter rather i had a $500 or $5000 credit line, if i'll only be using it sparingly to keep it active, and build a positive history?



IMO, the difference is that it is easier to keep uti under control with the higher CL.
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Epic Contributor
Posts: 28,098
Registered: ‎04-01-2007
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Re: rebuilding history


ByrdMan wrote:
IMO, the difference is that it is easier to keep uti under control with the higher CL.


Absolutely! Also, when you outgrow the secured cards and move up to the next level (and that will happen sooner than you think, I'll bet), some CCC's look at the limits on your current cards and offer you CL's based on what you already have. Sort of a halo effect, I suppose.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Mega Contributor
Posts: 19,519
Registered: ‎03-19-2007
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Re: rebuilding history

Lets say you make a charge of $200,  If  you put it on the $500CL card, that is a %util of 40% if  you dont pay it off before the next reporting date.  However, if you put it on a %5000CL card, it is only a %util of 4% on that card.  The %util of each card, as well as overall %util, is factored into your score.  So the scoring algorithm answer is clear and obvious.  Low CL cards require a LOT more effort to ensure that even relatively small charges dont lead to high % utiizations.  If you monitor each card closely, you can control and avoid this.  But its a whole lot easier to have a higher CL, and thus not worry so much about this from month to month.

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