CLI - How are scores affected?

[Anonymous]

My husband and I were married last July and are planning to buy a home this fall.  We met with a realtor and lender on Thursday.  I had, naively, been moving our CC balances to one or two cards using attractive balance transfers. 

The lender told us that we should be aiming for less than 50% utilization on the cards and recommended that we ask for increased credit limits rather than transferring balances back around. 

Couple of questions on this process:

1. Is it better to have 50% (or less) utilization on several cards or higher utilization (80% or so) on a few and low or zero utilization on the rest?

2. If we increase the credit limits (and reduce our utilization), about how much will that imporve our credit scores?  How long do those improvement take?

3. I've seen on here that Chase does "hard pulls" -- I have a BOA and a US Bank CC and my husband has Cap 1 and Citi.  Does anyone know if these companies do hard or soft pulls?

thanks

[Tuscani]

Welcome.. Please read the Scoring 101 thread:

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=2654

[Anonymous]

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huskerMH wrote:

My husband and I were married last July and are planning to buy a home this fall.

...

I had, naively, been moving our CC balances to one or two cards using attractive balance transfers. 

...

1. Is it better to have 50% (or less) utilization on several cards or higher utilization (80% or so) on a few and low or zero utilization on the rest?

2. If we increase the credit limits (and reduce our utilization), about how much will that imporve our credit scores?  How long do those improvement take?

3. I've seen on here that Chase does "hard pulls" -- I have a BOA and a US Bank CC and my husband has Cap 1 and Citi.  Does anyone know if these companies do hard or soft pulls?

---

CLIs are better in that CLIs give you higher overall CL. However, you're likely to incur hard INQs.

Cap 1 and BOA are likely going to do hard pulls. However, I'd call all of your CCCs and ask about CLIs. Tell 'em you're looking at buying a home, and you really don't wanna incur more INQs on your CRs. Ask whether based on your good payment history you can get a CLI without an INQ. Also ask about APR reductions, and ask whether you can get it without an INQ. Remind them about buying a home. If they ask, tell 'em you're undecided about a mortgage company, you've talked to one already, and you'd consider other options if they were competitive.

On your questions:

1) Your FICO score looks at both your individual CC util as well as your overall CC util. As such, it's best to "load balance".

2) Increasing any of your CC CLs will increase your overall CL and decrease your overall util. Increasing a CL on a CC with a balance will also decrease that CC's util.

3) Can't speak to USB and CITI, but Cap 1 and Chase likely will pull unless they say otherwise. My guess is that USB and CITI will hard pull unless they say otherwise.

Worst case scenario, BT to load balance. After you get the mortgage, then you can move the debt to lower APR CCs.

Take a look at my CC Payoff Tactics to try and leverage as much as you can outta your CCs, but I think at the moment if you're in active househunting/buying mode, I'd take one crack at each of the CCCs, get what you can now without an INQ, and BT to load balance if needed.

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