High CL

[SteveUrkel]

New to this so dont bash me for the question.. But what is the point of having high credit lines if going over util %hurts credit scores?

[Anonymous]

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@CarlosC88 wrote:
New to this so dont bash me for the question.. But what is the point of having high credit lines if going over util %hurts credit scores?

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Because util is outstanding balance/Total credit lines.

So the higher the credit line, the smaller the utilization % for the same amount of balance.

But that is a too Myfico explanation.  In the real world, the point of having high credit lines is that it allows people to charge more, either paying it off each month or not. 

[09Lexie]

^^^^^^ true

[FocusedAndDetermined]

If you manage your money and your CLs correctly, the higher your limit the less likely you are to have high utlilization.  Say your statement cuts with a $100 balance.  If you have a $500 limit, that $100 is 20%.  If you have a $1k limit, it's only 10% and a $10k limit the same $100 is only 1%. 

You can charge close to your limit (no matter how high or low) but the trick is to make payments before the statement closes, so you show low utilization.

[itguy_65]

OK, so here's a question.  After bad circumstances about 20 years ago, I've finally gotten my credit over 800 with all three bureaus.  My AAoA averages 9 years, with oldest being 28 years.  My credit lines are almost 100K, and now exceed my income by 10K.  My utilization is now less than 6%.  My question is, will this cause me trouble?  How much over income can CLs go without issue??  What has your experience been??

[tcbofade]

No, it won't cause you trouble.

There is no set formula for how far your available credit can go.  If you've got scores in the 800's with util in the single digits, I think you are fine both with where you are now, and for pretty much anything you'd like to apply for.  You're doing great, don't overthink it. 

[Anonymous]

so a friend of mine has a business mortgage loan with a $304,500 installment loan showing on my cr. Monthly payment is nearly $13,500.

How does that account into overall credit utilization. or is it installment loan even if its business mortgage the utilization doesn't matter.

[juggalo9er]

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@SteveUrkel wrote:
New to this so dont bash me for the question.. But what is the point of having high credit lines if going over util %hurts credit scores?

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to keep the utilization low period....in a way its like a condom, better to have it and not need it than to need it and not have it

[tcbofade]

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@Anonymous wrote:

so a friend of mine has a business mortgage loan with a $304,500 installment loan showing on my cr. Monthly payment is nearly $13,500.

How does that account into overall credit utilization. or is it installment loan even if its business mortgage the utilization doesn't matter.

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Won't affect your utilization...but it will KILL your DTI.

Whether personal or business, a mortgage loan does NOT affect your utilization.  Util is ONLY measured on revolving accounts.

[Anonymous]

thats what i needed to know for sure. utlization is only applicable to Revolving Accounts.

does AAoA also matter just the same;meaning take all revolving accounts only and calculate AAoA.

or does any and all accounts are taken into consideration.

What i mean is when considering for app by Creditors, UW may only want to know AAoA of Revolving accounts, not exactly mortgage or installment accounts. is that true.

I can have 2014 Revolving account but 1992 Installment account; If UW considers only Revolving Accts, then i m in trouble isnt it?