Increase in CC limit

[babbles]

what effects does a credit card limit increase have on your dti if you keep the balance at a zero balance?  And does an inquiry distinquish between an increase in limit with the same card? 

[Anonymous]

I'm pretty sure it does nothing to the debt to income ratio, as total utilization has no bearing on that at all (all debt/total income = dti). An increased CL will only help in lowering credit utilization, assuming you have debt balance on a CC. A CL increase may also help to get better offers/CCs, such as Chase (since they don't like being your first high-limit card). 

As for the inquiry, I have no idea. I would guess that the inquiry wouldn't see a change until your bank/lender actually reported it to the CRB. 

[babbles]

I don't want to waste an inquiry but my situation is:

25% dti  

USAA card has a $500 limit with zero balance

Navy Federal CU  $24000 limit with $9700 balance @ 40% utilization.

Maybe I don't need to increase USAA at all?  Just Navy Fed?

scores are 760 and above across the board and 69k per year income.

[K-in-Boston]

A hard inquiry won’t be distinguished between a new application and an existing card on your credit reports; they’re both applications for new or additional revolving credit.

As for DTI, that’s debt to income ratio. Changing the amount of revolving credit available doesn’t change that, only changing either your income or the amount of money you owe and payments that must be made.

[Anonymous]

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@babbles wrote:cores are 760 and above across the board and 69k per year income.

Maybe I don't need to increase USAA at all?  Just Navy Fed?

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I guess the question is why you want to increase your limit?  It doesn't impact DTI.  Only you can answer the question as to whether or not you "need" to increase your USAA limit.

[babbles]

I want a lower utilization and chasing 800! 😃

[Anonymous]

Well, as you know, paying down CC debt is the best way to lower utilization.

I don't know anything about USAA cards, whether their CLIs are SP/HP and how easy/lucrative they are, but your $500 limit isn't doing you much good.  That being said, it would take you raising that $500 limit to about $10000 in order to drop your current aggregate utilization down across the 28.9% threshold in order to see a score gain.  Your gain here would probably be to the tune of 15 points or so, but only if you cross that threshold.  It's basically an "all or nothing" event here; getting a CLI on that $500 limit card to take you to an $8000 limit for example wouldn't yield you even a single FICO point.

[CreditInspired]

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@babbles wrote:

I don't want to waste an inquiry but my situation is:

25% dti  

USAA card has a $500 limit with zero balance

Navy Federal CU  $24000 limit with $9700 balance @ 40% utilization.

Maybe I don't need to increase USAA at all?  Just Navy Fed?

scores are 760 and above across the board and 69k per year income.

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Are these your only 2 CCs? Any other debts?

[Anonymous]

Yeah, honestly if you think a HP will necessary for a CLI, I would app for a new card...that way inquiry isn't wasted and you'll get an overall utilization boost. I'd shoot for cards with a history of high starting limits...like Alliant VS, Cap1 Savor and Venture, CSP, etc. Your scores seem good enough.

Other than that, you just need to pay off the debt you have. It's really the most effective way of boosting your score.

[Anonymous]

I would not suggest apping for a new card when someone is at ~40% aggregate utilization.  While an approval can still happen, it will without question be at worse terms; I'd shoot from the hip and say a SL on average would be maybe half of what it would be if utilization was in a good place.  So where the OP could see a $10k approval with ideal utilization, maybe he sees $5k due to being in a higher risk position at the time of the app.