topic Re: Multiple Credit Card Credit Line increase requests in Understanding FICO® Scoring

Multiple Credit Card Credit Line increase requests

tketch — Wed, 26 Oct 2016 15:49:16 GMT

I have been advised that a greater cerdit line will increase my FICO score ( now around 760 - FICO 8, depending on who you ask.) I have 4 credit cards with total of about $35k, usage < 2%, and I figure about $50k would be a better limit. My intention is to ask all 4 Credit Card Companies for an increase all in one day. But, I am unclear if such requests are like mortgages, where all inquiries are treated as one within a certain period of time. Will my score get dinged for 4 inquiries, or just one with these requests?

Re: Multiple Credit Card Credit Line increase requests

SouthJamaica — Wed, 26 Oct 2016 15:52:07 GMT

@tketch wrote:
I have been advised that a greater cerdit line will increase my FICO score ( now around 760 - FICO 8, depending on who you ask.) I have 4 credit cards with total of about $35k, usage < 2%, and I figure about $50k would be a better limit. My intention is to ask all 4 Credit Card Companies for an increase all in one day. But, I am unclear if such requests are like mortgages, where all inquiries are treated as one within a certain period of time. Will my score get dinged for 4 inquiries, or just one with these requests?

Don't do it if it's a hard pull.

Some companies do a hard pull, some a soft pull.

Give us the names of the banks so we can tell you which ones are ok.

Re: Multiple Credit Card Credit Line increase requests

tketch — Wed, 26 Oct 2016 16:06:04 GMT

Thanks,

Credit cards are:

Discover ,

Chase-Slate(VISA),

Capital One (Master Card)

USAA (Visa)

Re: Multiple Credit Card Credit Line increase requests

Anonymous — Wed, 26 Oct 2016 22:02:37 GMT

If each card's utilization isn't above 2% a credit line increase won't really help. What could help is letting only one show a balance and have everything else show $0.00.

Re: Multiple Credit Card Credit Line increase requests

Anonymous — Wed, 26 Oct 2016 22:23:45 GMT

@tketch wrote:
I have been advised that a greater credit line will increase my FICO score ( now around 760 - FICO 8, depending on who you ask.) I have 4 credit cards with total of about $35k, usage < 2%, and I figure about $50k would be a better limit.

Whoever advised you is mistaken. MryFlyGuy is correct -- a bigger credit limit will not in itself help your score. Not even a fraction of a point.

To give you an example that places this in high relief, suppose you had two guys, Bob and Fred who have exactly four credit cards. Their CC utilization, age of accounts, # of derogs, in fact virtually everything about their two profiles is the same. The only difference is that Bob has four credit limits of $500 each, and Fred has four credit limits of $25,000 each. Both guys will have exactly the the same credit score. As long as their CC utilization is the same, the bigger CLs that Fred has won't make a difference.

Do you have any open installment loans? (Auto loan, student loan, personal loan, mortgage, etc.) If you do not, we can suggest a painless way to increase your score a lot that will cost you almost nothing.

Re: Multiple Credit Card Credit Line increase requests

SouthJamaica — Wed, 26 Oct 2016 22:34:11 GMT

@tketch wrote:
Thanks,

Credit cards are:

Discover ,
Chase-Slate(VISA),
Capital One (Master Card)
USAA (Visa)

Discover and Capital One are soft pull, so you can apply for a CLI on their respective web sites without any "ding" at all.

Chase is a hard pull, so don't do it.

USAA I don't know about.

BTW I don't agree with the above 2 posts; I think having more "available credit" does help your score.

Re: Multiple Credit Card Credit Line increase requests

Anonymous — Wed, 26 Oct 2016 23:01:21 GMT

Hi SJ! Is there any particular reason you think that? I haven't seen FICO suggest in any of their publications that this might be the case, or seen any reason codes that might suggest that.. And I can't think of a general conceptual area that they haven't disclosed in their models, although the exact details in each case they often do not specify. Thus, although they don't disclose exactly how each model penalizes lates, they don't make a secret that its better to have fewer lates. They don't disclose exactly how where the break points are for CC utilization, but they are are forthright that in general you will benefit from a lower rather than a high utilization. They don't specify the details of how age works, but they don't hide that older accounts are in general better.

If having cards with big CLs gave you extra points over cards with low CLs, it seems like they'd allude to that general fact somewhere -- much as they do in the other general areas I mentioned.

Incidentally some scoring models may very well do what you are suggesting -- e.g. the Lexis Nexis insurance score, which has reason codes that state exactly that. (LN likes it when your average credit limit is above $10,400 -- i believe that's the number.) I just haven't seen any evidence that FICO does that.

Re: Multiple Credit Card Credit Line increase requests

rhall2009 — Wed, 26 Oct 2016 23:12:05 GMT

Evening everyone, I feel one of 2 ways about more credit is that It doesn't boost your score to get more and more CLI if your already reporting one card with 1% total utilization. However I do see the benefit that having a higher limit on cards helps to maintain your score and reduce the fluctuations if you happend to leave more of a balance on that one said card. While it still may drop a point or two it won't dip because it will be less of a percent than had you had low limit cards.

Re: Multiple Credit Card Credit Line increase requests

SouthJamaica — Wed, 26 Oct 2016 23:25:18 GMT

@Anonymous wrote:
Hi SJ! Is there any particular reason you think that? I haven't seen FICO suggest in any of their publications that this might be the case, or seen any reason codes that might suggest that.. And I can't think of a general conceptual area that they haven't disclosed in their models, although the exact details in each case they often do not specify. Thus, although they don't disclose exactly how each model penalizes lates, they don't make a secret that its better to have fewer lates. They don't disclose exactly how where the break points are for CC utilization, but they are are forthright that in general you will benefit from a lower rather than a high utilization. They don't specify the details of how age works, but they don't hide that older accounts are in general better.

If having cards with big CLs gave you extra points over cards with low CLs, it seems like they'd allude to that general fact somewhere -- much as they do in the other general areas I mentioned.

Incidentally some scoring models may very well do what you are suggesting -- e.g. the Lexis Nexis insurance score, which has reason codes that state exactly that. (LN likes it when your average credit limit is above $10,400 -- i believe that's the number.) I just haven't seen any evidence that FICO does that.

From what I have observed in my own case and others, and from what I infer the various reason codes, it is easier to get high FICO scores if you have larger available credit which you're not using much.

Re: Multiple Credit Card Credit Line increase requests

Anonymous — Wed, 26 Oct 2016 23:27:38 GMT

Hello rHall. Yup, You are definitely right. There's no question that having big credit limits would make it easier to have a low utilization.

To take again those two guys I gave as an examplle... Bob with four cards at $500 each and Fred with four cards at 25k each.

No question that Fred can put all his spending on one card, and spend a sizable 3-5k a month. Without even working at it he can have all his cards at $0 except one and a total utilization of 3-5%. In Bob's case he can also spend 3-5k per month and have the ultralow utilization, but he'll have to pay his cards down 2-3 times during that month.

So no question that it is more convenient to have big CLs. The question is whether Fred has any scoring advantage over Bob if their utilization is the same. I was asking SJ if he knew of any FICO literature that suggested that might be the case.

Re: Multiple Credit Card Credit Line increase requests

Anonymous — Wed, 26 Oct 2016 23:39:30 GMT

@SouthJamaica wrote:
From what I have observed in my own case and others, and from what I infer the various reason codes, it is easier to get high FICO scores if you have larger available credit which you're not using much.

Do you have any particular reason codes in mind? Also curious if you have any particular people in mind (presumably regular contributors here on myFICO) who are thinking your way on this. For example, Thomas Thumb, Revelate, iv, manyQuestions, etc?

Assume that we are all in agreement that CC utilization is no doubt a huge driver for score. The question is whether two people with exactly the same CC utilization and number of $0 balances (etc.) could get different scoring bonuses, because one person had huge CLs compared with the other. (That's why I gave the case of Bob and Fred -- just to make the situation clear.)

PS. I am totally not being argumentative! I am genuinely interested in changing my mind on this and learning something new.

It's worth observing that in the one clear case of a scoring system that I know does care about CLs (the Lexis Nexis model) it rewards you for having a high average credit limit. Thus, people who have many cards, some of which with smaller limits, actually do worse than a person with fewer cards but with CL more tightly concentrated in fewer tradelines.

Re: Multiple Credit Card Credit Line increase requests

SouthJamaica — Thu, 27 Oct 2016 01:25:04 GMT

@Anonymous wrote:
@SouthJamaica wrote:
From what I have observed in my own case and others, and from what I infer the various reason codes, it is easier to get high FICO scores if you have larger available credit which you're not using much.

Do you have any particular reason codes in mind? Also curious if you have any particular people in mind (presumably regular contributors here on myFICO) who are thinking your way on this. For example, Thomas Thumb, Revelate, iv, manyQuestions, etc?

Assume that we are all in agreement that CC utilization is no doubt a huge driver for score. The question is whether two people with exactly the same CC utilization and number of $0 balances (etc.) could get different scoring bonuses, because one person had huge CLs compared with the other. (That's why I gave the case of Bob and Fred -- just to make the situation clear.)

PS. I am totally not being argumentative! I am genuinely interested in changing my mind on this and learning something new.

It's worth observing that in the one clear case of a scoring system that I know does care about CLs (the Lexis Nexis model) it rewards you for having a high average credit limit. Thus, people who have many cards, some of which with smaller limits, actually do worse than a person with fewer cards but with CL more tightly concentrated in fewer tradelines.

It's just my opinion based on my experience and everything I've seen.

Re: Multiple Credit Card Credit Line increase requests

Anonymous — Thu, 27 Oct 2016 02:16:05 GMT

Quick shout out to our OP (tKetch):

My friend SJ and agree about tons of FICO-related stuff. And I think he would tell you that one of the questions I asked you earlier is important, namely "do you have any open installment loans?" If you don't, this is THE important thing for you to work on, given that you already have four cards and a very low utilization. We can definitely give you a technique for getting a good extra 30-35 points.if you don't have an open loan.

Don't hesitate to keep working with SJ on techniques for enlarging your credit limits via SOFT pulls. SJ knows all about that. Big CLs are always nice for convenience -- it's just that you shouldn't IMO expect any score increase from that.

You will also find that time itself will cause your score to go up, as your accounts age and any inquiries fall off.

Re: Multiple Credit Card Credit Line increase requests

brother7 — Thu, 27 Oct 2016 07:51:42 GMT

Assuming your spending pattern remains the same, having larger CLs will result in lower % utilization which generally means higher credit scores.

Based on this logic, if your goal is generally higher credit scores, then I would recommend applying for CLIs only if they are soft pulls, i.e. Discover and Capital One via their respective websites.

That's my 2 cents. Good Luck!

Re: Multiple Credit Card Credit Line increase requests

Anonymous — Fri, 28 Oct 2016 12:26:56 GMT

I disagree with SJ's opinion above regarding higher credit limits somehow being a positive for FICO scoring purposes. Outside of utilization of course. I agree with CGID that overall available credit doesn't matter.

There are kids that are 19-20 years old with short credit history with say 2 starter cards with $300 and $500 credit limits that can possess scores of 800.

I went years of having only a single credit card with a relatively small limit and I had scores in the 790-810 range for a decade. My overall credit limits now are over 10x that, and my scores are in the 750-770 range. The additional credit lines did not improve my scores one bit. This is pretty easy to tell also when you go from say $4k in available credit lines to $90k in 2-3 cycles. Utilization is what matters, and a $300-$400 balance on $4k in credit lines or $90k in credit lines yields essentially the same exact result scoring wise.

Re: Multiple Credit Card Credit Line increase requests

tketch — Fri, 28 Oct 2016 12:46:37 GMT

@Anonymous wrote:
If each card's utilization isn't above 2% a credit line increase won't really help. What could help is letting only one show a balance and have everything else show $0.00.

Thanks mryflyguy. I've always thought that what you say is true, and always had the best score when the balances were tuned that way. However, in an experiment over the last few months I did this:

completely paid off all balances. My score suffered by 9 points, apparently for being too responsible.
I left balances greater than 0 and less than 6%, and put the balances first on 1, then 2 then 3 cards. My score didn't change. Instead it remained just the same as just one card with a small balance and the rest paid off.
This month I will try putting balances on all 4 cards with about 5% Usage.

So far I'm convinced that the 6% rule works no matter how its distributed.

Im wondering if ou have experiences that prove this differently.

Re: Multiple Credit Card Credit Line increase requests

tketch — Fri, 28 Oct 2016 13:04:21 GMT

@Anonymous wrote:

.... "do you have any open installment loans?" If you don't, this is THE important thing for you to work on, given that you already have four cards and a very low utilization. We can definitely give you a technique for getting a good extra 30-35 points.if you don't have an open loan.
...

Thanks CreditGuyInDixie, I’m interested in what you may have to say about installment loans and their effect on scores. I have 2 mortgages, and the 4 CCs but no Installment loans. I had a HELOC for about 15 years that I paid off and closed in August this year. It was listed as an installment loan on credit reports. I thought it might affect the credit mix and mess with the score. But it didn't. Instead my score remained near its recent high after the installment payoff. You seem like you are speaking from wisdom and experience. What should I do?,

Re: Multiple Credit Card Credit Line increase requests

SouthJamaica — Fri, 28 Oct 2016 13:13:23 GMT

@Anonymous wrote:
I disagree with SJ's opinion above regarding higher credit limits somehow being a positive for FICO scoring purposes. Outside of utilization of course. I agree with CGID that overall available credit doesn't matter.

There are kids that are 19-20 years old with short credit history with say 2 starter cards with $300 and $500 credit limits that can possess scores of 800.

I went years of having only a single credit card with a relatively small limit and I had scores in the 790-810 range for a decade. My overall credit limits now are over 10x that, and my scores are in the 750-770 range. The additional credit lines did not improve my scores one bit. This is pretty easy to tell also when you go from say $4k in available credit lines to $90k in 2-3 cycles. Utilization is what matters, and a $300-$400 balance on $4k in credit lines or $90k in credit lines yields essentially the same exact result scoring wise.

Once again.....

"all other things being equal".

Re: Multiple Credit Card Credit Line increase requests

tketch — Fri, 28 Oct 2016 13:28:47 GMT

And I thought there would be a simple answer! Thanks all -- This is educational indeed.

I am going to help this situation by applying for the increase and reporting back on how well it worked.

The reason I think that greater credit limits will increase FICO score is this:

I saw someplace that most of “FICO high achievers have credit limits at $50,000 or higher”, probably in association with one or another credit report. This implies that a higher credit limit would increase my score. I suppose that causality comes into question: Are high achievers offered higher credit limits, or do higher credit limits breed better scores as I’m speculating here?
MYFico account dashboard has a ‘highlighted action” section that recommends “get a credit card with a 2,500 credit limit. Simulated credit scores show that the score would go up by 15.
When I got a new Credit Card in January of this year with a 5,500 limit my FICO score went up by 8 points. However, I was carrying about 45% usage at the time, and the new card knocked it down to 36%. So I can’t say whether the improved score was due to CLI or Usage.

I don’t have much to lose either way right now but want the best credit for possible refi next year. My last inquiry is over a year old, so I don’t think I’ll be damaged much if one shows up.

I plan to test SouthJamaica’s theory of soft0 pull v hard pull CCs and lend fodder for the current kerfuffle with voices in support of no action, forcefully argued by CreditGuyInDixie . Next month I’ll ask Discover and Capital one for increased limits. When it all registers with CRAs I’ll let you all know what happened .

Re: Multiple Credit Card Credit Line increase requests

Anonymous — Fri, 28 Oct 2016 14:22:10 GMT

Hello tKetch! Here is the info you wanted about the Share Secure Loan technique. Just read the first few posts. It will give you all the info you need.

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secure-technique/m-p/4506756

You mention that you have two mortgages. Are they open loans? I.e. you are still making payments on them? If so, as the guidance explains, you already have open installment loans and the Technique is unlikely to help you. You still might be able to help those of us who are following the technique, so if you'd be willing to let me send you a PM I will explain how.

Great idea to use SJ's approach of soft pulls ONLY for CLIs.