Credit Line Increase always good for credit?
10-18-2013 09:37 AM
I've been seeing a lot of advice that having a higher revolving credit limit would help my score, but I'm not sure if that's true, and I also worry about the hard inquiry I'd take if I request an increase (my bank has confirmed that it would be a hard one).
And although several sources say higher credit = higher score, the myFico score generator suggests my score will go down if I opened a new card. (I'm actually thinking of doing a CLI, not a new card, but that wasn't an option in the simulator. Is there a difference?)
I pay all my balances off every month, so my utilization ratio isn't going to change very much no matter how high the limit goes
By way of background, I'm getting ready to apply for home mortgages (in the next 12 months or so) and checked in on my credit scores for the first time in my life. It turns out, I'm pretty good? Equifax = 758 (yesterday) 777 (today?!), Experian 741, Transunion 820. I have on hard inquiry that's about to expire for a home mortgage pre-approval and two or three missed payments from 2008, nothing else negative at all. I have $19k in revolving credit lines open, I carry a reported balance of <$200 (I pay my cards in full every month), and I have a couple open student loans that are all in good standing.
$19k in credit lines seems like a ton, especially since I don't use any of it, but I have the income to support a higher limit if I wanted it. Is getting an increase going to help my score? Is it worth the hard inquiry? Transunion's website, specifically, analyzed my report and cited my lack of sufficient revolving credit as a negative factor. (They also said my oldest credit card, from 2003, is too recent, so.. not sure what to believe there). Equifax seems to think my amount of credit is "Great". Experian liked that my credit line was above $5000, but unclear if I would get extra points for overachieving there