topic Re: Strategy on CLI with current Low Utilization in General Credit Topics

Strategy on CLI with current Low Utilization

Anonymous — Fri, 27 Sep 2013 18:44:09 GMT

Greetings,

I anticipate my credit to rise to ~700 by the end of the year. I plan on pursuing a CLI on every single card because all of them ( 5 cards) have a paltry ~$250-$750 limit. I recently applied for a Barclays card ( Opened Sept. 2013) and they also gave me a limit of $500. I don't want to limit my spending to just gas and pizza..

I had a couple late payments 5 months ago so I think it would be difficult to ask for the CLI now. Yet my strategy is to ask for the CLI ( during March 2014) while keeping utlization between 1%-6% on every single card.

Would this be the best strategy? Alternatively, I suspect that Barclays would increase my limit if I upped my utililzation to 10~20% on just the Barclays card while keeping other cards constant at 1%-6% util, so then I can argue that I need a higher limit to bring the cards util to >7% and use the Barclays card for major purchases because I normally spend $2k-$3k a month on expenses anyway.

So I am unsure with what is the best way to proceed and get the most out of my credit by March.

What do you guys think?

Current Cards:

1. Cap One - $750

2. Cap One - $300

3 Cap One - $500

4. First Premier - $250 ( Won't be asking for CLI with this card for obvious reasons )

5 Barclays - $500

Additional Info:

- My AAoA just hit 7 years this month

- Just started getting smart about my credit and so I have been at 1%-6% utilization for 4 months

- No BK's

- I have two charged off account that will drop off on November so I expect a bigger increase on my FICO by then

- Only 1 inquiry this year, and 1 last year

Re: Strategy on CLI with current Low Utilization

Anonymous — Fri, 27 Sep 2013 19:24:45 GMT

For optimum FICO scores it is best to let all but one CC report 0 balances and the other at 9% or below. You get dinged for too many CC reporting a balance and for letting them all report a 0 balance.

Re: Strategy on CLI with current Low Utilization

Anonymous — Fri, 27 Sep 2013 21:46:32 GMT

Thanks for your help!

Re: Strategy on CLI with current Low Utilization

lecorps4fun — Fri, 27 Sep 2013 23:32:39 GMT

I would personally work on getting rid of the late payment. Recent lates really weigh down your scores.

Re: Strategy on CLI with current Low Utilization

Anonymous — Sat, 28 Sep 2013 00:38:48 GMT

How would one go about getting rid of the late payments?

Re: Strategy on CLI with current Low Utilization

AndySoCal — Sat, 28 Sep 2013 03:43:11 GMT

I agree with the post about working getting the late payment off the report if possible. I doubt with that on your report you will get to 700 + FICO score. Also if you other derogatory informantion on your report work on that as well. I would ask Cap1 iif your account(s) are elligable ofr the credit steps program.

Re: Strategy on CLI with current Low Utilization

takeshi74 — Mon, 30 Sep 2013 13:13:02 GMT

@Anonymous wrote:
I don't want to limit my spending to just gas and pizza..

You don't have to. You can always pay before statement end to lower reported utlization.

Re: Strategy on CLI with current Low Utilization

RobertEG — Mon, 30 Sep 2013 17:23:36 GMT

The apparent primary reason for seeking a CLI is to improve the ability to charge more per month without going over teh limit on the card, and not to improve FICO scoring.

Even if you go above the CL and pay prior to reporting, and thus not showing over the limit on your CR, doing so may still raise some creditor eyebrows.

They will still see the card being over its limit, even though paid down prior to their monthly reporting date.

So I see clear benefit to getting the CLI for financial flexibility purposes.

Asking for the CLI will most likely result in a hard-pull, regardless of approval, so their are some scoring issues other than reduction of % util by increasing overall CL.

If you dont need your score to app for additional credit in the next year, that would not be a significant issue, as the hard-pull would no longer score after one year.

So you coud afford the small hit for a new inquiry.

The Barclay card referenced as the one for which a CLI would be requested was just opened this month, and thus just had a credit review that determined the CL they deem appropriate. I would thus suspect that they would want to see a year or so of activity before changing their current risk assessment.

Additionally, as for their risk review, are the mentioned charge-offs now paid, or do they remain unpaid? Having recenty gone through a review by Barclay,I presume that they have your current CR in their file, which shows the COs. Thus, they will presumably still be aware of those COs even after they become excluded next month.

If the debt remains unpaid, they might still be a killer in making a decision on extension of additionall credit.

For scoring purposes, I would probably wait until later next year.

I would only ask for the CLI at an earlier time if the need for more CC limit is primarily for spending flexibility rather than FICO score improvement.

Re: Strategy on CLI with current Low Utilization

Anonymous — Mon, 30 Sep 2013 17:49:15 GMT

Thanks for the heads up, glad people are actually following up to my question. Much appreciated.

I learned my lesson with charging cards to the max. Now I never go over 7%. If I do, I usually pay 99% off within the following week.

The CO's were because I had issues with company business practices and lack of customer care. Although I will never pay them back, I don't plan on taking matters to a personal level with future creditors at the cost of my credit score any more.

Re: Strategy on CLI with current Low Utilization

Anonymous — Mon, 30 Sep 2013 19:06:27 GMT

@AndySoCal

Thanks for the advice, I am on the phone with capital one right now and was lucky enough to get a really nice CSR on the first phone call. They are giving me liniency by refunding any late charges on all three capital one card and sending a "dispute" for my 60 day delinquencies on all 3 cards I have with them to 4 credit bureaus. So hopefully, I will see a 700+ credit score by January. By the way these late charges were within 6 months, and were the only ones.

P.S I was told that the removal on the credit report isnt garaunteed. However, I am confident the negative marks will be removed since it is a request from the credit card company that reported the delinquincies from the onset.

Re: Strategy on CLI with current Low Utilization

RobertEG — Tue, 01 Oct 2013 20:02:31 GMT

While I can certainly understand reluctance to pay the charged-off debts if you feel that there were poor business practices on their part, it might still be best to bite the bullet and clear the debt.

As long as those debts remain unpaid, they can still come back to hurt you.

In any app for new credit, if asked to disclose you debt, including any unpaid, delinquent debt, you would be obliigated to disclose, even if the OC or other adverse reporting on the debt has become excluded from your credit report. Credit report exclusion does not result in satisfaction or elimination of delinquent debt.

The prospective creditor is unlikely to get involved in your assertion that the debt is not valid.