Testing method to get 25k CL on each new credit card

[wdkwang]

Hi,

I have a 814 FICO, 9 cards, and 224k total credit limit. I'm experimenting with a method to see if i can get a 25k limit on each new credit card application in the future. I read on a few articles that the provided credit will be based on several factors that readers of this forum are aware of but the one i want to point out is that how creditors may base it on the credit limits of your other cards. Currently all my CL's are 25-34k except for 2 that are 13k and 14k. I will request a credit limit increase on them 6 months from now to 25k. If successful on the CLI's, then I would surmise all new applications should have a minimum of 25k, or at least 20k with a creditor I do not have a previous relationship with. I understand some creditors are on the stingy side and this is not a guaranteed method, but I think most creditors will be generous as 3 of my more recent applications had CL's of 21k, 28k, and 34k at approval. 

Would like to hear anyone's thoughts or experiences with this. Thanks

[FinStar]

You can certainly test your theory, but it will all boil down to each lender's algorithms plus a variety of other factors.

I could potentially see NFCU or First Tech as some contenders, for instance (if not already part of your collection). As you approach a higher end of the spectrum with total revolving (unsecured) tradelines, some lenders *may* potentially approve around or above your intended target while others will not.

Curious, though, why the $25K benchmark? What tangible benefit does that provide given other tradelines in similar ranges? Do you find yourself exceeding a variety of them based on normal or overall usage?

[SBR249]

This may be somewhat dependent on the product that you apply for as well. There are cards that are capped as to the limit that you can get. 

[wdkwang]

Hi FinStar, thanks for taking the time to reply. To answer your question, I set the benchmark at 25k for a few reasons:

1. It gives me a safe margin for utilization rate as my expenses or needs vary greatly.

2. Up until now, requesting a higher CL seems to have a positive impact on my score and has very likely aided in boosting my score rather quickly in a short timeframe.

3. 20-30k seems to be the limit for many creditors based on what I read, or at the very least, they are generally generous with CLI up until the 20-30k range. The exceptions appear to be annual fee cards, for example, my CSR is my highest at 34k which is what was offered during approval. I have not requested a CLI since opening.

I intend to see if this method will let me ride closer to the elusive 850 score.

[Anonymous]

There can be many constraints to the test that the OP is going for.  One argument is the one that he made, that higher limits now improve the chances of higher limits later.  An equal argument can be made for the converse, though, which is that a lender may not want to "compete" with the higher limits one already has.  They may say, "This guy already has X trade lines with 5-figure limits ($25k+ in this case), so why would I bother handing him another?"  As stated above, these things can be very lender-specific.  A couple of lenders I can think of that are known to act in opposite ways would be Chase and Discover.  Chase has been known to match your highest limit or even exceed it at times.  Discover on the other hand usually wants to be top dog and prefers those with few to no cards, so if they see 9 cards with $25k limits apiece I wouldn't be surprised to see them come in with a $8k-$15k approval or so, as to not try and "compete."

Another huge constraint to this discussion would be income and overall limits relative to income.  At some point someone is going to hit their total limits ceiling [relative to their income/profile] and at that time approval limits could be dramatically reduced as a result.

One other point though for the OP is that I don't believe many lenders look at ACL all too much.  They may look to see that you have one or two cards at $25k+ already when considering what limit to hand you, but I don't feel at all that they'd be influenced by someone with 9 cards having 7 of 9 of them with $25k+ limits verses 9 of 9 with $25k+ limits.  ACL isn't a huge consideration and under FICO scoring isn't considered at all.

[Anonymous]

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@wdkwang wrote:

Hi,

I have a 814 FICO, 9 cards, and 224k total credit limit. I'm experimenting with a method to see if i can get a 25k limit on each new credit card application in the future. I read on a few articles that the provided credit will be based on several factors that readers of this forum are aware of but the one i want to point out is that how creditors may base it on the credit limits of your other cards. Currently all my CL's are 25-34k except for 2 that are 13k and 14k. I will request a credit limit increase on them 6 months from now to 25k. If successful on the CLI's, then I would surmise all new applications should have a minimum of 25k, or at least 20k with a creditor I do not have a previous relationship with. I understand some creditors are on the stingy side and this is not a guaranteed method, but I think most creditors will be generous as 3 of my more recent applications have CL's of 21k, 28k, and 34k. 

Would like to hear anyone's thoughts or experiences with this. Thanks

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Seems to me that what you're thinking is a self-defeating strategy and will likely give you the exact opposite of what you're trying to achieve. 

The Card Act (2009) requires lenders to consider an applicant's ability to repay when granting credit; which is the reason why they ask about income (and assets in some cases).  So unless your income is increasing at a comensurate amount, adding additional tradelines will dilute you ability to repay.  Lenders clearly understand this and will likely offer you smaller credit lines on new accounts. 

[wdkwang]

Hi BrutaBodyShots, those are great pieces of insight that I wasn't aware of so thank you. I can definitely vouch for Chase in their CL generosity. However, I don't have experience with Discover. I hear CapitalOne is generous as well. 

Currently I do not have any loans so that very likely is a factor in credit score.

From here, I intend to retain at least 8 of my cards for building credit history, and enjoy any enticing sign-up bonuses here and there.

[Anonymous]

Absolutely.

Another factor to consider and one that may or may not apply would be max internal limits across a single lender. 

As an example, let's say that Lender Y has a max credit limit extension of $100k to any single person, regardless of number of accounts.  They may have a pair of $40k cards through this lender already and desire to apply for a third card.  In this example, the max approval such a person would receive would be a $20k SL, as they are already at $80k total exposure prior to the app.  For those with only one or maybe two cards from a single lender this may not be an issue, but if you're talking more it could certainly be a constraint to a large SL on another product from that same lender.

[SBR249]

While Capital One is a generous lender to some, that may not be true for all, even those with excellent credit. There have been enough reports of people with excellent credit being turned down or receiving low CLs on CapOne to lead me to suspect that Capital One has been tightening up their lending. There have also been reports of CLDs on high CL accounts for low spending as well as denial of CLIs for the same reason (myself included). 

All this leads me to believe that CapOne is generous to those who they believe will actually put spend through their cards and they are now becoming more strict about handing high CLs to people who they think will just let it go unused. After all, they have to account for allocation of lending capital to their investors and giving $30K to a person who will use 5% or less regularly is much less efficient than giving $3K to ten people who will likely use more of their CL. 

[Anonymous]

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@Anonymous wrote:

There can be many constraints to the test that the OP is going for.  One argument is the one that he made, that higher limits now improve the chances of higher limits later.  An equal argument can be made for the converse, though, which is that a lender may not want to "compete" with the higher limits one already has.  They may say, "This guy already has X trade lines with 5-figure limits ($25k+ in this case), so why would I bother handing him another?"  As stated above, these things can be very lender-specific.  A couple of lenders I can think of that are known to act in opposite ways would be Chase and Discover.  Chase has been known to match your highest limit or even exceed it at times.  Discover on the other hand usually wants to be top dog and prefers those with few to no cards, so if they see 9 cards with $25k limits apiece I wouldn't be surprised to see them come in with a $8k-$15k approval or so, as to not try and "compete."

Another huge constraint to this discussion would be income and overall limits relative to income.  At some point someone is going to hit their total limits ceiling [relative to their income/profile] and at that time approval limits could be dramatically reduced as a result.

One other point though for the OP is that I don't believe many lenders look at ACL all too much.  They may look to see that you have one or two cards at $25k+ already when considering what limit to hand you, but I don't feel at all that they'd be influenced by someone with 9 cards having 7 of 9 of them with $25k+ limits verses 9 of 9 with $25k+ limits.  ACL isn't a huge consideration and under FICO scoring isn't considered at all.

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AHA! That would help explain why Discover has been so chintzy with CLI's in that the most I've ever gotten from them was $900 on my older Discover IT. I was thinking that they did want to try to complete with my QS Visa with $16K CL, but I guess that was off base after all...