Will Limit Increase Help?

[Anonymous]

I have a credit card and am rebuiling my Fico score.  Started out with $500 limit but wanted to know if it would help my score if I asked and was approved for an increase to my limit.  I have no fear of being able to pay it all off now (Got a much better job and a fiance who is a financial hound and I love her for it).

Will a limit increase help at all?

[llecs]

It won't help your score if it reports $0 each month. If you carry a balance, then it will help.

[Anonymous]

What I mean is the CL to be increased from $500 to say $1000.  I thought being approved for a higher limit was a good thing?

[llecs]

Score-wise, an increased CL won't help your score if you are at $0 reporting. FICO considers utilization. So, if you have a $0 balance on a $500 CL, you are at 0% utilization. If your CL increases to $1000 and you still have a $0 balance reporting, then you are still at 0%. Your score will not increase.

Hoever, if you have a $500 balance on a $500 CL, you are at 100% utilization. Receiving a $1000 CL will reduce your utilization to 50%, and then you'll get an increase.