topic Re: Income to Total Credit Line Question in Credit Cards

Income to Total Credit Line Question

Meanmchine — Mon, 27 Jun 2016 18:00:13 GMT

Hi everyone

Baseline info

Income = $45k give or take)

Current TCL (credit cards) = $56k no loans. Mortgage 10 yrs old never a blemish

Current util = 9% ( $4.5 )

Hi bal cards =3 1300/2000 and 800/1500 and 1200/2000

Lo Bal cards = 2 cards at <20% rest at or near $0

Baddies = Alot- none recent and starting in Sept, they start falling off as all are almost 7years old

I anticipate being 720+ fico by new years ( except for experian which always hated me )

Current question

Right now I am over 100% in income to TCL ratio

I know that noone can give a definate answer but at what point do you think banks will say im at my cl max?

Which banks aree more likely to cut me off based on my income ratio

Right now Synch bank has the biggest eposure with about $30k. Im at the point where I only ask for Synch card CLI on just a few cards

Thanks for any advice

Re: Income to Total Credit Line Question

Anonymous — Mon, 27 Jun 2016 18:05:07 GMT

I think the baddies will be the overarching issue here much more than total credit limit. I'd spend time working on the baddies as best you can. Once the baddies have been addressed or removed, you are then in a better position to review and evaluate your overall profile.

Also, your utilization per card looks too high- even if your overall utilization is good, I'd work on getting the per card utilization down as much as possible.

I'd work on removing baddies and reducing utilization as first steps if I were you, then evaluate overall what your credit needs are and how to best meet those needs. Don't be overly focused on a specific number, but on your overall profile and needs. Good luck.

Re: Income to Total Credit Line Question

disdreamin — Mon, 27 Jun 2016 18:20:14 GMT

I'm nowhere near 1:1 credit lines to income and I am still continually surprised that companies are willing to extend me more credit. Then I see people with 3xTCL to income and I'm like WHAAAAAT?!?! So I'd say once things are all cleaned up you're probably good to go. They'll let you know when you get there, as you'll see denials instead of approvals when you decide to apply for additional credit, right?

Re: Income to Total Credit Line Question

CreditCuriosity — Mon, 27 Jun 2016 18:53:06 GMT

I am getting closer and closer to 2x my income and feel weird about it.. I try to keep my CL's are 1.5x my income, but it is becoming near impossible now with my credit profile getting better and better.. I even am canceling cards that I don't find value in, but the dang CLI buttons esp SP ones. Cancelled an 8k card on Friday and a few more are coming this following month

@OP: If you pay off those 3 cards with pretty high utilization approx 60ish percent on 3 cc's you would see a pretty nice score increase as a few are near maxed. That alone could could possibly put you above 720... I would pay them all off except 1 reporting < 9% util and your scores will go up by a good amount i suspect

Re: Income to Total Credit Line Question

JagerBombs89 — Tue, 28 Jun 2016 02:05:39 GMT

I'm at just over 4x credit limits to income.

Re: Income to Total Credit Line Question

disdreamin — Tue, 28 Jun 2016 21:47:18 GMT

Not to hijack the thread but...yeah, I'm hijacking.

How in the WORLD do you get to 3x or 4x credit lines to income?! I am pretty darn sure the banks would *never* extend me that kind of credit. What am I doing wrong?! I got 4506t'd with AmEx trying to go up by a few thousand before. Sheesh. I need to learn from y'all. So please teach me, oh guru's of credit!

To keep this at least somewhat on-topic, OP, your idea of keeping it to 1.5 times income seems about right to me. If I do personal income, I'm about 1:1 right now. However, my SO and I share all cards, so it's less than 1:1 for household (adding up all our credit lines, and all cards but one are my cards). I think I'm doing something wrong here though, as it seems like maybe I'm shooting for too low a number?!

Re: Income to Total Credit Line Question

Anonymous — Tue, 28 Jun 2016 21:18:07 GMT

I'm at more than double my annual income. Of course, double squat is still squat.

Re: Income to Total Credit Line Question

kdm31091 — Tue, 28 Jun 2016 21:26:40 GMT

There are different schools of thought. Some people feel exposure doesn't really matter. Only you can decide what's best for you. My exposure is about 2x my income and I'm not really comfortable exceeding that. The more open credit limit you have, the more some lenders could view it as potential debt (and others don't care). Beyond that, it's just not necessary, IMO.

Re: Income to Total Credit Line Question

Anonymous — Tue, 28 Jun 2016 21:50:56 GMT

7 months into my credit building journey, @ a little over 50% of my income. Shooting for 6 figures by 30!

Re: Income to Total Credit Line Question

Meanmchine — Tue, 28 Jun 2016 22:27:29 GMT

LOL Captool.

I wish I had saved the letter but I had applied for the Best Buy store card and was denied and it had something to do with income. I cant remember the exact reason. So Im guessing that Citibank might be a little sensitive

Re: Income to Total Credit Line Question

driftless — Tue, 28 Jun 2016 22:32:02 GMT

My CL's are way under my individual and family income.

Re: Income to Total Credit Line Question

gdale6 — Wed, 29 Jun 2016 00:14:18 GMT

@disdreamin wrote:
Not to hijack the thread but...yeah, I'm hijacking.

How in the WORLD do you get to 3x or 4x credit lines to income?! I am pretty darn sure the banks would *never* extend me that kind of credit. What am I doing wrong?! I got 4506t'd with AmEx trying to go up by a few thousand before. Sheesh. I need to learn from y'all. So please teach me, oh guru's of credit!

To keep this at least somewhat on-topic, OP, your idea of keeping it to 1.5 times income seems about right to me. If I do personal income, I'm about 1:1 right now. However, my SO and I share all cards, so it's less than 1:1 for household (adding up all our credit lines, and all cards but one are my cards). I think I'm doing something wrong here though, as it seems like maybe I'm shooting for too low a number?!

Im at about 3.25x income and I couldnt even get 2x until my CRs were totally clean and Fico was in excess of 730, once it hit 760+ it opened the door to even higher limits and more cards. Keep your DTI low and your overall reported revolving credit utilization low and it opens up a much better world.

Re: Income to Total Credit Line Question

Gmood1 — Wed, 29 Jun 2016 00:23:39 GMT

I'm now at 5x my income. Let your usage report! Keep utilization below 10%. I keep mine around 2%. Stay away from excessive amounts of store cards. I don't have any. Though I wouldn't mind a Lowe's card. Once you're around 730 and above with clean reports...the sky is the limit!

Re: Income to Total Credit Line Question

Anonymous — Wed, 29 Jun 2016 00:54:36 GMT

From reading these forums IMO income is the LEAST important factor to individual CL's and overall total CL. Factors such as derogs, utilization, AAoA, etc. are far more important IMO. I've seen people on here with perfectly clean reports, extremely low utilization and high AAoAs but low (relatively) income and they have 3-5X their income in combined credit limits. Conversely you take a guy with an income twice the national average but he's got some baddies, some fair utilization and a lower AAoA and his combined limits are at or below his annual income.

Proof (to me) that income isn't nearly as important of a factor is that 9 times out of 10 it isn't even verified, where all of the other measurables on your credit report are easily verifyable in a matter of moments by anyone that needs to take a look.

Re: Income to Total Credit Line Question

Thomas_Thumb — Wed, 29 Jun 2016 13:17:39 GMT

@disdreamin wrote:
I'm nowhere near 1:1 credit lines to income and I am still continually surprised that companies are willing to extend me more credit. Then I see people with 3xTCL to income and I'm like WHAAAAAT?!?! So I'd say once things are all cleaned up you're probably good to go. They'll let you know when you get there, as you'll see denials instead of approvals when you decide to apply for additional credit, right?

1) Have a job that pays very well

2) Have a job that requires a lot of travel where travel expenses are close to annual income

3) Work for a company that allows personal credit cards to be used for T & E.

4) Build up CLs based on big charges and perfect payment history.[aggregate CL = 2x to 3x annual income]

5) Get tired of 80% travel and settle for a job paying 1/2 the salary of the road warrior job.

Boom! aggregate CL now = 4x to 6x annual income.

Re: Income to Total Credit Line Question

Anonymous — Wed, 29 Jun 2016 02:58:11 GMT

As was said earlier, most banks consider income as only one of several factors in determining credit limits.

My current total credit limit is approximately half of my income, but I've also never asked for a limit increase either.

Re: Income to Total Credit Line Question

Anonymous — Wed, 29 Jun 2016 03:04:04 GMT

My total available credit (cards and PLOCs) is about 1.5x current income.

I actually thought that most of my cards are pretty low limit even for my not-that-great income but each lender has their own criteria so we'll see.

Re: Income to Total Credit Line Question

UncleB — Wed, 29 Jun 2016 09:51:03 GMT

@Anonymous wrote:
I'm at more than double my annual income. Of course, double squat is still squat.

^^^^ This is me as well... LOL!

It seems that for people with more modest incomes (like myself) having total credit lines that are multiples of our income isn't that out of the ordinary. Contrast that with somebody who earns $200k per year... most likely they won't have a need for $800k in credit lines even if they can qualify for it.

If you look you'll be able to find exceptions, of course.

Re: Income to Total Credit Line Question

Thomas_Thumb — Wed, 29 Jun 2016 13:49:21 GMT

UncleB wrote:
It seems that for people with more modest incomes (like myself) having total credit lines that are multiples of our income isn't that out of the ordinary. Contrast that with somebody who earns $200k per year... most likely they won't have a need for $800k in credit lines even if they can qualify for it.
If you look you'll be able to find exceptions, of course.

Quite true.

There are posters making over $500k per year with an aggregate CL under $200k and others likely making $60k to $80k with aggregate CLs over $200k. Once you get past a certain dollar amount, transactions generally aren't credit card based - so limited benefit in $500k and higher CLs.

Re: Income to Total Credit Line Question

RonM21 — Wed, 29 Jun 2016 20:15:50 GMT

It is an interesting topic because you do see some lopsided numbers when comparing the income to limits. The amount made must not factor in as heavily as you would think. No true rhyme or reason to this, apparently.