Benefit to 5k+ tradeline?

[Caught750]

So I'm pretty sure I've heard somewhere that there is a significant benefit to establishing a 5k+ revolving tradeline. Is there any truth to this? If so what are the benefits to this? Is this best to do ASAP during a rebuild?

[NRB525]

You have to look at it as a coincidence of progress on your rebuild, not a cause / driver of your rebuild.

As lenders get more comfortable with you paying on time, they see improvements in your score, and can give higher CL.

That does have a further positive benefit by improving utilization, so it is good to get those higher limits, but as a specific factor, +$5k limits are not a directly measured FICO formula item. You could achieve similar scores with 5 limits of $1k each, and keeping utilization in check, and probably better results than just one $5k card ( though by the time one gets to a $5k card, other cards are in the wallet as well )

[Caught750]

I wasn't necessarily referring to scoring per se. More so along the lines of hearing that a 5k tradeline can lead to potential or current lenders opening up a bit. Like crossing a line in the sand almost.

[Anonymous]

The anecdotal approach is yes, you absolutely need 5k+ lines for present credit health and for it's future.
Some high end cards start at 5k, with several even higher. Those banks scrutinize applicants, look more at just scores, can determine trends, and most likely do not want to be "first."
Doubtful anyone with a 720+ with under 5 years of history posesses only a slew of $1500 limit accounts.
Willing to say everyone with high scores, even if their best card is around 5k, they could apply with anyone anytime and replicate a handful more accounts that pop in at 5k or higher without "building" them. That is the reward of good credit health, and part of it is not applying for New accounts just to see if you can get them, you know already. It's sort of like martial arts. You don't need to spar with inexperienced to remind yourself you can put them on the ground every time.

[Caught750]

My signature is current with cards but scores have climbed a few points.

There is a lender I'd like to get in with for a few reasons and it's likely that a new acct could have a 5k line or be there in 90 days.

I'm currently debating whether to pull the trigger or wait a few months. AAoA is solid at about 5 years. Util is very low and DTI is 20ish. I have old baddies but have been solid for more than 5 years. This lender has alot of potential value and establishing a relationship has its own benefits beyond the card. They also use F9 which puts all scores over 700.

[bizarrocreditworld]

I think there is a psychological thing about having a $5,000+ tradeline since it means you are being seen as a good customer or a good risk. I think this occurs at each additional $5,000 level until you start seeing very high limits.

Also, $5,000 is when you usually (but not always) start to see the SL for Visa Signature and MasterCard World cards. Getting one of these is like getting into a club for some, even if the benefits of such a card are never used. At the same time, APRs tend (again, not always) to be lower.

I've also heard it said that a large limit on one bank card can lead to offers for large limits on other bank cards. If you apply for a card, I think the lender would likely prefer a customer with multiple $5K cards than one who has a bunch of cards that adds up to $5K in credit. 

[Anonymous]

I don't know if there are direct tangential benefits to your score because you reach $5000 or that you've reached $5000 because you've sufficiently improved your credit. Regardless I really don't care, I'm just happy to have reached that on my main card recently. I have no reason to try to apply for 100 more cards like people on here do. To be completely frank with you, I don't even know why they do it. I am basically progressively closing all my other cards because I have the one now with 5K. That's mutiples of my total expenses per month. Why would I need anymore? 

[Anonymous]

It might depend on the lender... when I applied for my Amazon Prime Visa a few weeks ago (and that was my first ever account with Chase so I have zero history with them), they gave me an instant approval with an $8500 SL even though my credit reports showed my existing TLs at $2000 and $500...and utilization being on the high side at the time as well.  Would they have given me more if my existing limits were higher?  Maybe... maybe not.... no way to know without a time machine... or if I was the guy who wrote or configured the software.  Maybe having a $50K HELOC was a factor as well...

In any case, as soon as I had the card and could set up online access I had the limit lowered to $1500... so I now my highest revolving TL is $2000.  I remember in my 20s when I was approved for my first "gold card" with a $5K limit... my ego loved that... my checking account didn't... I ended up closing it less than a year later and take months paying it off... now in my 50s limits like that cause me to say "that's way too high".

[Caught750]

My personal thoughts on that are a little different. I'm considering applying for NFCU. The reason I'm interested in available revolving credit mostly pertain to in case of emergency. I PIF always and never pay interest. I have been working on an emergency fund as well but life has thrown alot of garbage my way, even in my early 30s.
My main concern is shutting down growth with lenders I already have relationships with. Honestly so far I've loved discover and Amex and would like to grow my cards with them. I've since opened PenFed but they're quite conservative.
I simply want some peace of mind with higher limits. I'd also heard that showing experience with those limits can help with growth or limit other growth.

[simplynoir]

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@Caught750wrote:
I wasn't necessarily referring to scoring per se. More so along the lines of hearing that a 5k tradeline can lead to potential or current lenders opening up a bit. Like crossing a line in the sand almost.

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Yes, and just look at Chase and their CSR as proof. Chase doesn't like to be your first $10k+ card and like to see on your reports experiences with these size of CLs first before giving you the card. There might be datapoints some may provide that say otherwise but your chances definitely improve for sure by having those large limits already on your credit report.