Help me understand the buzz behind CLI's

[MuadDibx]

Simply put....to keep my utilization as low as possible.

[Anonymous]

Indeed, util is everything. You get credit by showing you dont need it, or arent using it.

[sarge12]

I would urge everyone to review the learn about scores section above. Many have the mistaken assumption that their income affects their credit score. It does not have anything to do with the score. DTI may be a reason for denial of credit however, even if you have an 850 score, a high DTI ratio will never lower that score though. Stated once again, utilization is a very important factor in the fico scoring model. Utilization is the percentage of available credit used...not a percentage of your income. Salary has no effect on your score whatsoever....none!!!

[MrsCHX]

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@kdm31091 wrote:

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@sarge12 wrote:

High achievers do not ask for CLI because they plan to use that much credit. It is all about how important utilization is in the credit scores. At some point though you can go to far and have too much available credit vs income and actually damage scores. Both overall credit utilization, and credit utilized on a single card can affect score. I like to keep my overall utilization to less than 5%, and credit utilized on a single card under 10%. If my credit limit on a card is 10k, then I try to only use 1k of that, and under no circumstance will I exceed 20% utilization. People who achieve 800+ credit scores usually achieve them by having a strategy, and utilization is part of that, thus the CLI requests. I now only ask for CLI's on my go to cards...currently Citi DC WEMC, and American Express BCE! I also always PIF! Scores are all near 800 or above!

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The thing is that your utilization can still be low without chasing constant CLIs. Beyond that, while utilization is a scoring factor, it's a very temporary one. You can manipulate it and get the points month by month, unlike other scoring factors which are more long term. So while it may help you achieve a given score, it's not important to optimize it monthly unless you're applying for something.

Most people with high credit scores, to be honest, probably give little thought to obsessing over utilization. They just have long term good payment history and are not in debt. They keep utilization low relative to income, sure, but I doubt many do the maximization tricks. Most of the general public, including those with good scores, don't put that much effort into these things.

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Utilization can't ALWAYS be low without CLIs. I want to use my Capital One QS for as much as I can for my monthly budget categories (groceries, gas, entertainment, pet expenses, personal care, etc). I am at about $650/mo for these things. My current $1300 limit doesn't give me the opportunity to do normal spend and stay below 10% UTI. I pay 2-3 x month. I know when my statement cuts and when Cap One reports so I know to pay it by that date but it is an annoying thing to manage. 

I have 2 cards (QS and QS1) with $1300 each and alternate using them. However, getting a single card with a $6K+ limit will make life easier. I can spend like normal, get my rewards, pay my bill when it's due and not worry about utilization.

While UTI is temporary as to the profile, we see enough here on the boards about lenders freaking out. We are constantly being soft pulled by these banks and some are pretty jumpy over inquiries and CLI. So it *IS* possible to be negatively impacted by high UTI percentages. 

[Anonymous]

I have not read all 11 pages of this thread, so forgive me if this has been stated already. Your question got me thinking today, and I have a theory.  A lot of us here are rebuilders.  We did not get ourselves in the situation of needing to rebuild by being naturally patient people.  Requesting credit limit increases can help people feel like they are actively doing something now to work on their credit, rather than just waiting for time alone to heal it. It's something to do.  It generally does no harm if the requesti is a SP, and for a rebuilder, it can certainly help.

[sarge12]

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@Anonymous wrote:

I have not read all 11 pages of this thread, so forgive me if this has been stated already. Your question got me thinking today, and I have a theory.  A lot of us here are rebuilders.  We did not get ourselves in the situation of needing to rebuild by being naturally patient people.  Requesting credit limit increases can help people feel like they are actively doing something now to work on their credit, rather than just waiting for time alone to heal it. It's something to do.  It generally does no harm if the requesti is a SP, and for a rebuilder, it can certainly help.

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The best advise I could give anyone rebuilding is to read everything in the learn about scores section above and know exactly what is and is not in the scoring models. Then you can focus on the ones that are in your control. Pay special attention to the ones in the 35% and 30% catagories. I will say that bad habits are what causes most people to get in credit trouble, and good credit habits is the cure. Once you start practicing good credit habits for a while, it actually becomes somewhat addictive. It becomes...well..a habit! I use to have a hard time even remembering to pay my bills. Now I sometimes become impatient waiting on charges to post so I can pay them and I pay so often that I no longer even have to know when they are due. They all get paid at least twice a month.

[Anonymous]

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@MrsCHX wrote:

Utilization can't ALWAYS be low without CLIs. I want to use my Capital One QS for as much as I can for my monthly budget categories (groceries, gas, entertainment, pet expenses, personal care, etc). I am at about $650/mo for these things. My current $1300 limit doesn't give me the opportunity to do normal spend and stay below 10% UTI. I pay 2-3 x month. I know when my statement cuts and when Cap One reports so I know to pay it by that date but it is an annoying thing to manage. 

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I think that most of us who are against the endless CLI quest have always had the exception: if your limit on a card you really use is low, especially if you have to pay several times a month, then certainly go for CLIs when you can.   And similarly if you overall CL is very low (toy limits on SCT cards for example!) it MAY be worth getting a few CLIs even if those cards aren't going to be used.

But at least here, once people are out of those situations, they STILL carry on.  $200K in total CL, $10K+ cards, there really isn't much of a need to continue to increase limits.   If you can PIF, you can adjust utilization as desired, and anyway, score only matters when you are planning to app.   I suspect it is much more of a (misguided) ego thing than any real need for most people.

[Anonymous]

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@sarge12 wrote:

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@Anonymous wrote:

I have not read all 11 pages of this thread, so forgive me if this has been stated already. Your question got me thinking today, and I have a theory.  A lot of us here are rebuilders.  We did not get ourselves in the situation of needing to rebuild by being naturally patient people.  Requesting credit limit increases can help people feel like they are actively doing something now to work on their credit, rather than just waiting for time alone to heal it. It's something to do.  It generally does no harm if the requesti is a SP, and for a rebuilder, it can certainly help.

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The best advise I could give anyone rebuilding is to read everything in the learn about scores section above and know exactly what is and is not in the scoring models. Then you can focus on the ones that are in your control. Pay special attention to the ones in the 35% and 30% catagories. I will say that bad habits are what causes most people to get in credit trouble, and good credit habits is the cure. Once you start practicing good credit habits for a while, it actually becomes somewhat addictive. It becomes...well..a habit! I use to have a hard time even remembering to pay my bills. Now I sometimes become impatient waiting on charges to post so I can pay them and I pay so often that I no longer even have to know when they are due. They all get paid at least twice a month.

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Which makes little financial sense, you want to have the issuer float the money as much as possible.   Once scores are high enough, it probably time to stop the maximization game, although I admit I still sometimes pay before statement cut, although now I have about 5 balances reporting

[sarge12]

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@Anonymous wrote:

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@sarge12 wrote:

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@Anonymous wrote:

I have not read all 11 pages of this thread, so forgive me if this has been stated already. Your question got me thinking today, and I have a theory.  A lot of us here are rebuilders.  We did not get ourselves in the situation of needing to rebuild by being naturally patient people.  Requesting credit limit increases can help people feel like they are actively doing something now to work on their credit, rather than just waiting for time alone to heal it. It's something to do.  It generally does no harm if the requesti is a SP, and for a rebuilder, it can certainly help.

---

The best advise I could give anyone rebuilding is to read everything in the learn about scores section above and know exactly what is and is not in the scoring models. Then you can focus on the ones that are in your control. Pay special attention to the ones in the 35% and 30% catagories. I will say that bad habits are what causes most people to get in credit trouble, and good credit habits is the cure. Once you start practicing good credit habits for a while, it actually becomes somewhat addictive. It becomes...well..a habit! I use to have a hard time even remembering to pay my bills. Now I sometimes become impatient waiting on charges to post so I can pay them and I pay so often that I no longer even have to know when they are due. They all get paid at least twice a month.

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Which makes little financial sense, you want to have the issuer float the money as much as possible.   Once scores are high enough, it probably time to stop the maximization game, although I admit I still sometimes pay before statement cut, although now I have about 5 balances reporting

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Makes sense to me!!!!

[wasCB14]

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@Anonymous wrote:

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@sarge12 wrote:

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@Anonymous wrote:

I have not read all 11 pages of this thread, so forgive me if this has been stated already. Your question got me thinking today, and I have a theory.  A lot of us here are rebuilders.  We did not get ourselves in the situation of needing to rebuild by being naturally patient people.  Requesting credit limit increases can help people feel like they are actively doing something now to work on their credit, rather than just waiting for time alone to heal it. It's something to do.  It generally does no harm if the requesti is a SP, and for a rebuilder, it can certainly help.

---

The best advise I could give anyone rebuilding is to read everything in the learn about scores section above and know exactly what is and is not in the scoring models. Then you can focus on the ones that are in your control. Pay special attention to the ones in the 35% and 30% catagories. I will say that bad habits are what causes most people to get in credit trouble, and good credit habits is the cure. Once you start practicing good credit habits for a while, it actually becomes somewhat addictive. It becomes...well..a habit! I use to have a hard time even remembering to pay my bills. Now I sometimes become impatient waiting on charges to post so I can pay them and I pay so often that I no longer even have to know when they are due. They all get paid at least twice a month.

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Which makes little financial sense, you want to have the issuer float the money as much as possible.   Once scores are high enough, it probably time to stop the maximization game, although I admit I still sometimes pay before statement cut, although now I have about 5 balances reporting

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With interest rates on savings so low, I can understand paying early. If someone typically pays off a CC purchase a month early, then the lost interest income is maybe 0.1% of the transaction amount. If that person is using many cards to maximize rewards, and paying early makes it less stressful, then that's a reasonable tradeoff.

I've come to let most balances report and to trust autopay.