topic Re: Lower High Credit Line? in General Credit Topics

Lower High Credit Line?

Anonymous — Mon, 14 Sep 2009 19:06:06 GMT

So I finally succumbed to the ubiquitous “Do you know your credit score?” advertising and signed up for myFICO’s quarterly monitoring. Turns out everything looks in order – TU score is 777 – the only negative stated is “You have too many credit accounts”. I have 25 accounts but most are old and closed. I guess they remain for 10 years and there not much I can do about it except let time pass.

Anyway, now that I’ve joined I’m surprised at how active these forums are! Seems some folks are quite absorbed with monitoring / polishing their scores. My biggest concern is/was accuracy of the information, as well as your thoughts regarding a debate I have with my wife which maybe you can help me with:

My BOA card has a CL of $53,100. My wife thinks this is dangerous in the event of identity thief / fraudulent use. She would like me to request a lower CL. I was going to do this but via this valuable forum, I learned there is a credit utilization component to FICO scoring so now I am hesitant to make the request. I can explain the utilization factor to her but an outside opinion may also prove useful.

Thanks for in advance for any thoughts you may have.

Message Edited by Sebago on 09-14-2009 12:06 PM

Re: Lower High Credit Line?

Anonymous — Mon, 14 Sep 2009 19:40:30 GMT

CCs count about 1/3 of your scores. UTIL = Total CL from all CCs and total use on all CCs. FICO likes to see total UTIL under 10% and likes to see several CCs with Bal $0.

In case of ID THEFT...You would notify the police and have a report. This report is sent to the OC and to the CRAs. You are not responsible for any charges that you did not make!

Re: Lower High Credit Line?

Anonymous — Mon, 14 Sep 2009 20:31:10 GMT

So I can tell her there is nothing to worry about since we are not responsible for any unauthorized charges and that the high CL is a good thing based on the resultant low utilization .

Let me know if I'm missing something, otherwise - Thanks for responding!

Re: Lower High Credit Line?

smallfry — Mon, 14 Sep 2009 20:39:22 GMT

Sebago you don't want those old closed accounts to fall off your report that is the body of your score. Average Age of Accounts both open and closed is very important. How much do you charge is a normal month and what is your total available credit? My account has trimmed cardsd and credit limits to dodge possible ID Theft. In a perfect world you have no liability but if not handled correctly they can play games with you.

Re: Lower High Credit Line?

Anonymous — Tue, 15 Sep 2009 11:52:39 GMT

In an average month we charge between $3,500 & $4,000 between 2 cards since most all of our expenses are paid via CC . We are fortunate enough to be able to PIF each month. In total we have 5 CC (2 are merchant cards). The combined CC CL is $95,950. Again, my wife thinks this is way too much available credit but based on HappyDays response, I guess it's okay.

With regard to AAoA the next one (old mortgage) falls off in 12/2010 and although you stated "you don't want old closed accounts to fall off your report", I don't see how there's anyway to avoid it.

Thanks

Re: Lower High Credit Line?

Jazzzy — Tue, 15 Sep 2009 13:59:56 GMT

@Anonymous wrote:
So I finally succumbed to the ubiquitous “Do you know your credit score?” advertising and signed up for myFICO’s quarterly monitoring. Turns out everything looks in order – TU score is 777 – the only negative stated is “You have too many credit accounts”. I have 25 accounts but most are old and closed. I guess they remain for 10 years and there not much I can do about it except let time pass.

Anyway, now that I’ve joined I’m surprised at how active these forums are! Seems some folks are quite absorbed with monitoring / polishing their scores. My biggest concern is/was accuracy of the information, as well as your thoughts regarding a debate I have with my wife which maybe you can help me with:

My BOA card has a CL of $53,100. My wife thinks this is dangerous in the event of identity thief / fraudulent use. She would like me to request a lower CL. I was going to do this but via this valuable forum, I learned there is a credit utilization component to FICO scoring so now I am hesitant to make the request. I can explain the utilization factor to her but an outside opinion may also prove useful.

Thanks for in advance for any thoughts you may have.
Message Edited by Sebago on 09-14-2009 12:06 PM

Did they say you had too many accounts...or too many accounts with balances?

If too many accounts, you're correct...there's nothing to do. Also, that may have been given as a reason simply because there was nothing else lowering your score. Sometimes they grasp a bit for reasons. I have more accounts than that...some open, some closed. I've never gotten that criticism yet. Some of mine are school loans. School loans seem to grow exponentially on your credit report. One loan turns into 3 accounts as they are transferred and consolidated. I have 30+ accounts.

Also, fraud and identity theft are low on our list of worries. We do use credit monitoring, and there are many ways to do that. We would be alerted of a change right away. I also check our balances online quite often. I think monitoring is important. My son did not learn until a mortgage loan officer pulled his reports that one of his cards had been used in Montana to withdraw a $4k cash advance. My son lived in Boston at the time. This was a card he didn't use, and his address had even been changed on the card. It was a mess to straighten out...mainly because he hadn't alerted the cc company right away. Fraud can be reversed...but only if you learn about it and the cc company is notified. Monitoring is important, even if you don't care much about checking your FICO score.

Re: Lower High Credit Line?

Anonymous — Tue, 15 Sep 2009 14:42:28 GMT

Hi LynetteM,

Of the 25 accounts, 10 are open of which 6 have balances (Mortgage, HELOC's, Car Loan & CC's).

With regard to monitoring, in the addition to joining myFico, we're now checking our CC's & other accounts online a few times a month.

Thank for your input!

Re: Lower High Credit Line?

pattycake — Tue, 15 Sep 2009 16:18:44 GMT

Sebago, you are already a FICO High Achiever, so you've nothing to worry about. Anything above 760 already qualifies you for the best credit products out there, so congrats! A lot of us are working toward that now.

Re: Lower High Credit Line?

Anonymous — Tue, 15 Sep 2009 17:09:54 GMT

@Anonymous wrote:
CCs count about 1/3 of your scores. UTIL = Total CL from all CCs and total use on all CCs. FICO likes to see total UTIL under 10% and likes to see several CCs with Bal $0.

In case of ID THEFT...You would notify the police and have a report. This report is sent to the OC and to the CRAs. You are not responsible for any charges that you did not make!

A CC with a $53k CL won't count as part of utilization. It will be scored more as an installement. Somewhere around $40k-ish the CBR's stop counting in the revolving equation.

If you use a CC and run a balance, then this is actually beneficial, since you won't be dinged in uti. However, this means your CL also will not help to "dilute" your other CC balances for utilization either.

Re: Lower High Credit Line?

Anonymous — Tue, 15 Sep 2009 17:22:03 GMT

Pattycake - thank you.

As stated in my initial post, I recently checked my CR for the first time because of the nonstop credit score advertising. You would think that at 45+ years I would have already inquired. I'm thankful to learn my credit is good.

My main reason for posting was to ascertain if my wife concerns of having a high CL on one of our CC was warranted. Based on the feedback here, the high CL is a good thing and she (we) need not worry.

It is good to see there are lot of folks diligently working on verifying/improving their individual credit profiles and that there is a community such as this dedicated to supporting those efforts.

Thanks again,

Sebago

Re: Lower High Credit Line?

Anonymous — Tue, 15 Sep 2009 20:30:18 GMT

txjohn,

Your knowledge has added a little twist.

You are right, the 53k is not considered to be part of the utilization calculation. I verified this by looking at my CR and doing the math to get the stated ratio of revolving balances to credit limits. The numbers agree w/o the 53k. The only thing is the Account Type is listed as a “Revolving Account” under the Account Details so one wouldn't know this w/o checking the math.

Thanks for pointing this out. I still don’t think I will change anything – probably not necessary but I know a lot more than I did when I started this post!

Sebago

Message Edited by Sebago on 09-15-2009 01:30 PM

Re: Lower High Credit Line?

Anonymous — Thu, 24 Sep 2009 17:12:14 GMT

Regarding "liabilty to charges caused by ID theft": Most of today cards has "0 Liability" when they offer to you, so make sure to check the clauses/agreement on your statement or w/ customer services (some CC make you liable only for the first $50). However, you have to "act in good faith" by notifying the CC company as soon as you notice the charges (usually via checking w/ your monthly statement), which mean they usually give you 30, 45, or 60, or even 90 days to dispute the charge (in writing, phone call will not protect your rights). In a dispute, usually you call them, tell them what happened, they put a lock on your account then send you the paperworks for you to put in your statement of claim/dispute regarding the charge w/ any proofs or verification (if you have one), like you never traveled to Alaska or buy anything from Alaska and the charge come from there.

Also, w/ today internet, many CC offer "account alert" (Amex, Discover, Chase, etc) which you can setup so that it will notify you of any charge more than let say $500 (you set the amount), or give you a snap shot of the account once a week (Amex - Costco). All in all, there are many tools out there to help you protect your CC account/limits/spending, just check w/ your CC, signup w/ them, then explain to your dear wife that she can sleep tight at night now....

Hope this help a little.