Discover Offer to Increase CLI -- Good or Bad for FICO, if accepted?

[QuoAnimo]

I'm new to this, so I apologize if this is a stupid question.  I just received an offer to increase my CLI on a Discover Credit Card.  I did not seek the CLI.  I need to call in to confirm and I have a good relationship with Discover.   The proposed increase is $2,000.  Will this hurt or help my FICO score?  I am am purchasing a new home in the near future and will go through the application process in the coming weeks.  Will taking the increase help or hurt?  Thanks.

[daybreakgonesXe]

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@QuoAnimo wrote:

I'm new to this, so I apologize if this is a stupid question.  I just received an offer to increase my CLI on a Discover Credit Card.  I did not seek the CLI.  I need to call in to confirm and I have a good relationship with Discover.   The proposed increase is $2,000.  Will this hurt or help my FICO score?  I am am purchasing a new home in the near future and will go through the application process in the coming weeks.  Will taking the increase help or hurt?  Thanks.

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As long as it's a soft pull, it can't do anything but help!! It will help your util by increasing your active trade lines and lowering the debt ratio! However, if it's a hard pull, I would hold back until after you've closed on your home!

[aussiesareforever]

A CLI will almost always help as it decreases your utilitization (% of available credit used). What does your overall credit picture look like (current number of credit cards, balances and credit limits)

The only time it may be mildly (and transiently) hurtful will be if a HP is required for the CLI. You may or may not get a score drop with the HP and your mortgage loan officer may require a letter of explanation (depending on how many other inquiries you have)

I would say you should probably go for it, esp if it is a soft pull.

[QuoAnimo]

Thanks! By soft and hard pull you mean "soft" no additional credit check that would be reported/ "hard" Discover runs an inquiry that is reported.  Does that sound right?

[daybreakgonesXe]

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@QuoAnimo wrote:

Thanks! By soft and hard pull you mean "soft" no additional credit check that would be reported/ "hard" Discover runs an inquiry that is reported.  Does that sound right?

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Well a soft pull is a credit check, but it's not recorded and can only be viewed by you! But you're right, it wouldn't be reported! Hard is correct as well

[aussiesareforever]

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@QuoAnimo wrote:

Thanks! By soft and hard pull you mean "soft" no additional credit check that would be reported/ "hard" Discover runs an inquiry that is reported.  Does that sound right?

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Pretty much. A soft pull is only seen by you and does not affect your credit score. A hard pull is seen by anybody that has access to your credit reports (banks, mortgage offers et al) and too many of those will cause your score to drop. In all reality , one single hard pull may not affect your credit score at all (or by much) and the change you see with increasing your credit limit may offset the score drop. However, mortgage officers like to ask about why you have a recent inquiry. It is usually not the end of the world if you have a good reason though.

When you call discover, ask them if it is going to be a sp or a hp.  However the reps may not know the difference and they may tell you wrong. 

[QuoAnimo]

Thanks!

[pdog661]

Tough questions to answer.  Here is my opinion.

If you carry any balance on any card the increase will benefit you.  The additional open credit will reduce your UTL rate which is a major portion of your credit file (35%).  If you can do this with a soft pull only - Win Win. I say go for it.  I do not see anyway this could not help your credit profile.

If the lenders will complete a hard pull, then you need to consider the effects both in your score, and how your profile will appear to those looking to lend to you. 

A hard pull will show in your credit file, and could drop your FICO score.  Inquiries make up 10% of your file, and like golf the fewer the better.  They last on your credit score for 2 years.  

In addition to a potential score drop the HP will also appear to lenders as you seeking additional credit, and could increase your risk to a mortgage lender.

A soft pull is equivalent to you running your credit.  It will not effect your FICO, and would not be consider when applying for a mortgage.

I would call discover, and ask the CSR if a credit pull would be needed, and if so what style of pull would be conducted.

I have had credit cards increase my limit without notifying me of their actions.  These have always been soft, but better to verify especially if a large purchase is in the near future (less then 6-12 months.)

[bettercreditguy1]

Discover has always been generous to my wife and myself with random cli's. They have always been a soft pull for us. However, you will find they randomly do soft inquiries to be certain you are up to date on your other charge/credit obligations.Congradulations and best wishes for continued successes! P.S. They like activity, the more you use it the faster it increases.