@Revelate wrote:
@precision wrote:
@BronzeTrader wrote:You are really obsessed with high CL.
I still remember someone posting of giving his 19-old son a huge credit line, like $190,000. Just amazing. Unutilized CL does not really do anything....
ummmm....
it pads utiization which is a giant deal. utilization is a pretty big part (30%) of credit score calculations.
I think his point was if you're being a good transactor (well good for us not so much for the lenders but I digress) massive limits are a bit superfluous, and if you're aware of the issue it's not too difficult to manage it anyway even with 2K in CL's, let alone near 200K.
I "need" like 50K in aggregate CL since my tax bills aren't that high anymore to not have to worry about my score having an epic fall if I don't manage it, but with how generous the market is these days I wound up with over 3X that amount without even trying hard.
i look at is future proofing. what you may not need today you may not need tomorrow. the fed just rasied rates today and forecasted 3 more raises in 2017. also, in the event of another economic downturn and banks go AA happy the more padded you are the better you are.
even in my short time in this game i have learned it is all about doing what you can today to make sure that you can weather what may come in the future. i would rather have as much a bulletproof profile as possible rather than thinking that I am good today. thinking like that will leave one exposed to trouble in the future.
i just started rebuilding two months ago. luckily i had clean reports but no score available. after much reading i learned very quickly to avoid the pitfalls of short term thinking like SCT tricks, a bunch of synchrony cards or commenity cards, and predatory CC lenders. I focused on prime bank cards and patience and i can't believe my progress in 2.5 months with a 833 TU and high 700's in EQ and EX. and that is only with 6 cc's and no loans and only 3 HP's on each CRA.
long term thinking is a must in this game.
@precision wrote:
@Revelate wrote:
@precision wrote:
@BronzeTrader wrote:You are really obsessed with high CL.
I still remember someone posting of giving his 19-old son a huge credit line, like $190,000. Just amazing. Unutilized CL does not really do anything....
ummmm....
it pads utiization which is a giant deal. utilization is a pretty big part (30%) of credit score calculations.
I think his point was if you're being a good transactor (well good for us not so much for the lenders but I digress) massive limits are a bit superfluous, and if you're aware of the issue it's not too difficult to manage it anyway even with 2K in CL's, let alone near 200K.
I "need" like 50K in aggregate CL since my tax bills aren't that high anymore to not have to worry about my score having an epic fall if I don't manage it, but with how generous the market is these days I wound up with over 3X that amount without even trying hard.
i look at is future proofing. what you may not need today you may not need tomorrow. the fed just rasied rates today and forecasted 3 more raises in 2017. also, in the event of another economic downturn and banks go AA happy the more padded you are the better you are.
even in my short time in this game i have learned it is all about doing what you can today to make sure that you can weather what may come in the future. i would rather have as much a bulletproof profile as possible rather than thinking that I am good today. thinking like that will leave one exposed to trouble in the future.
i just started rebuilding two months ago. luckily i had clean reports but no score available. after much reading i learned very quickly to avoid the pitfalls of short term thinking like SCT tricks, a bunch of synchrony cards or commenity cards, and predatory CC lenders. I focused on prime bank cards and patience and i can't believe my progress in 2.5 months with a 833 TU and high 700's in EQ and EX. and that is only with 6 cc's and no loans and only 3 HP's on each CRA.
long term thinking is a must in this game.
While I preach fiscal defensibility and believe that applies to credit as well, I'd put money on higher limit folks being the first targets in a financial downturn then people who have more reasonable ones.
In all other situations, let's be realistic: most familiies can survive transacting on something like 5K limits: how many people do you know who have 5K in spending per month when one excludes their mortgage or rent payments? They do exist absolutely, but the percentage of American consumers that falls into that category is low... so I get 90% of my limits pared back to 15K, oh the horror... even 99% to 1.5K, well if I suspect that might be coming I'll go out and get a 5K secured card anyway which other than a BK won't get taken. Maybe that in part comes from my surviving mostly fine (sans house) wearing the numbers off my debit card and throwing yuppie food stamps around.
Fear of this is overblown in my opinion, I could be wrong, but if the entire financial system falls apart I have much much larger concerns than if my credit cards go bye bye.
@precision wrote:
@Revelate wrote:
Fear of this is overblown in my opinion, I could be wrong, but if the entire financial system falls apart I have much much larger concerns than if my credit cards go bye bye.
my concern is not the credit cards perse but the damage that will be done to credit scores. with utility being 30% of a credit score a massive drop of available credit can cause huge drops in FICO.
in reality the credit card is not necessarily the issue. The FICO score is and that is what I want to protect.
what started me on this journey in the first place was realizing how limited my options were with having no credit score and after further research how poor credit scores also limit or remove your options. FICO's impact too many parts of our lives not to be protected as much as possible.
Ah I think I understand now.
What I mean by "transactors" are people who don't spend more than they can afford, namely they pay their balance in full and never pay any interest to a credit card company. They aren't carrying meaningful debt on revolvers.
If my limits get slashed and instead of at 1% I'm at 100% on the revolving utilization calculation, I'll take a non-trivial FICO score drop absolutely; however, I can fix that absolute worst case in a month, and with more and more lenders being willing to do mid-cycle reports it might be as short as 3-5 days to fix it. Fortunately revolving utilization has no memory, so this is a temporary problem if I have the cash to be able to write the check.
Now for people that are routinely floating longer term balances and can't simply write said check for it, your point has much more validity; however, I would suggest that particular issue is more germane to the consumer base at large, as I know where the vast majority of users who frequent this forum come down on... we preach PIFing with near religous fervor.
