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Should I Request a CLD?

ALK11
Established Contributor

Should I Request a CLD?

Here's the short. My total credit limit between all cards and lenders is slightly more than 100% of my annual income. Roughly a $73K income and I belive $75K in limits. My utlization is almost always less than 1%, sometimes it might jump up to 2 or 3%. I have perfect credit history and have never had a problem with a lender. I'm personally fine with the limits, but do you think banks might see a problem with them? Thanks. 

Message 1 of 10
9 REPLIES 9
SouthJamaica
Super Contributor

Re: Should I Request a CLD?


@ALK11 wrote:

Here's the short. My total credit limit between all cards and lenders is slightly more than 100% of my annual income. Roughly a $73K income and I belive $75K in limits. My utlization is almost always less than 1%, sometimes it might jump up to 2 or 3%. I have perfect credit history and have never had a problem with a lender. I'm personally fine with the limits, but do you think banks might see a problem with them? Thanks. 


Not at all. Do not request a CLD. Keep growing.


Total revolving limits 653000 (575000 reporting) FICO 8: EQ 716 TU 747 EX 715

Message 2 of 10
Janus
Senior Contributor

Re: Should I Request a CLD?

Yeah, but look who's talking. Smiley LOL ^

 

OP, I make less than you and have total combined CL's of $128K. It hasn't seem to be an issue with lenders yet, so i think you're fine.

 

What causes you to be concerned about it?






Message 3 of 10
pinkandgrey
Community Leader
Senior Contributor

Re: Should I Request a CLD?

Nooooo. It does happen, but it's not very often that banks come back and say you have too much available credit if everything else in your profile is good. 

 

I would say you're doing great!

Discover It: 19.7k
Amex ED: 18k
Citi DC: 7.7k
Fidelity Visa: 2k
Apple Card: 1.5k
Message 4 of 10
ALK11
Established Contributor

Re: Should I Request a CLD?


@Janus wrote:

 

 

What causes you to be concerned about it?


For the first time today I just stopped and looked at how much available credit I actually have. Then I put myself in the bank's shoes. I wouldn't feel too good loaning someone 75K if they only make 75K. If I were to even come close to maxing out my cards, there is no way I'd be able to pay it back. 

Message 5 of 10
kdm31091
Super Contributor

Re: Should I Request a CLD?

It can happen that a bank becomes concerned about one's exposure. It does not happen frequently, but it certainly can be viewed as a risk factor.

 

That said, I don't see much advantage in doing a voluntary CLD. If a bank feels you are a credit risk they will CLD on their own. If not, why even mess with anything? If you apply for a card and the issue comes up, then I would worry about it. Until/unless that happens I would just leave it alone.

Message 6 of 10
Gollum
Frequent Contributor

Re: Should I Request a CLD?


@ALK11 wrote:

Here's the short. My total credit limit between all cards and lenders is slightly more than 100% of my annual income. Roughly a $73K income and I belive $75K in limits. My utlization is almost always less than 1%, sometimes it might jump up to 2 or 3%. I have perfect credit history and have never had a problem with a lender. I'm personally fine with the limits, but do you think banks might see a problem with them? Thanks. 


If you have good/excellent FICO scores, and you don't plan to apply for more credit, then I think it's personal choice. You have many (in my opinion) credit cards, but again that is personal choice. If you want to make some changes, then I suggest considering closing some of your (maybe the lower-limit?) credit cards instead. The majority of your credit cards are relatively new with your oldest card not much different in age, so if you want to close some cards, now seems better than waiting until later.

 

To answer your specific question: Yes, some banks (Simmons Bank, for example) might think you have too much available credit.

Credit Scores: (FICO 8) 840 Experian May 2021, 844 TransUnion April 2021 | (FICO 9) 843 Equifax May 2021
Credit Cards (newest to oldest): NFCU VISA Platinum $25,000 | BECU Cash Back VISA $10,000 | American Express BCE $3000 | Simmons Bank VISA Platinum $7500 | Capital One No Hassle Rewards VISA Platinum $500
Message 7 of 10
Creditaddict
Legendary Contributor

Re: Should I Request a CLD?


@ALK11 wrote:

Here's the short. My total credit limit between all cards and lenders is slightly more than 100% of my annual income. Roughly a $73K income and I belive $75K in limits. My utlization is almost always less than 1%, sometimes it might jump up to 2 or 3%. I have perfect credit history and have never had a problem with a lender. I'm personally fine with the limits, but do you think banks might see a problem with them? Thanks. 


I always found the only banks that said I had to much available limit to me was just mad I wasn't using more with them!
Never CLD unless it's for exposure limits within 1 bank but you want another product like Synchrony $100k

Message 8 of 10
Aim_High
Senior Contributor

Re: Should I Request a CLD?


@ALK11 wrote:  For the first time today I just stopped and looked at how much available credit I actually have. Then I put myself in the bank's shoes. I wouldn't feel too good loaning someone 75K if they only make 75K. If I were to even come close to maxing out my cards, there is no way I'd be able to pay it back.

Understandable and I used to wonder the same thing.  But I absolutely wouldn't CLD as others have said.  The only reason I could see to do one would be if I or my authorized users had a spending problem and I was trying to keep some credit without letting it get out of control.  But if that were the case, I probably woudn't need access to credit cards in the first place.  Lol Smiley LOL 

 

Higher limits are a privilege.  If you can get them, keep them.  You've earned it.  Take care of them.  It's great to have the credit lines (IF) you were to need credit but moreover to pad your utilization rates.  Yes, you may technically have lines equal to 100% of your income, but you can't actually use that entire amount without tanking your scores.  So if you realistically think about only using 10% of your limits and no more, you've actually only got a very reasonable and useful $7500 in REAL credit.  The rest is just there for utilization padding. 

 

The rare lender might be concerned about how much credit you have available.  But most will not.  If you have high limits and low utilization, it's a very positive indication because it shows you have self-discipline and can handle high limits without blowing them.  It indicates that you should be capable of handling more.  You didn't get to 75K in credit lines by carrying a high utilization, either.  I bet your utilization has been around that 1% figure for a long time, and it helped you get to 75K. 

 

There are many on My Fico who have more than 1x their annual income in credit.  Some even have 2-5x or more! Smiley Surprised As a target, while I personally think most people only really "need" credit lines of about 30% to 50% of income without getting in too deep, having 1-2x income is (to me) a reasonable goal.   


 

 

 

 

 



Length of Credit > 35 years; Total Credit Limits > $500K
AoOA > 27 years (Jun 1993); AoYA (Aug 2020); Gardening since 08/15/20.
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Message 9 of 10
longtimelurker
Mega Contributor

Re: Should I Request a CLD?

While people here, IMO, are far too concerned with "growing"  (CLs aren't real money) there are only a few circumstances where it makes sense to do a CLD yourself.   As mentioned, if you know you are near max exposure with an issuer, and you really want super-card-X from them, lowering first may make the application go through automatically.    In many cases, a bank might do this themselves (taking some CL from one of your other cards, with or without asking permission) but to avoid a denial and possible recon, maybe.

 

The other situation, which probably doesn't apply, is where you want to avoid "eyes on the account", usually because you have done MS or something that an issuer may disapprove of.   Here you ONLY want automatic approvals (no manual review) and reducing exposure with the issuer may be a good way of maximizing the chance of this.

Message 10 of 10
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