high vs low CL

[Anonymous]

Hi, I'm new to the forum and I've scanned a lot of the posts but didn't see an answer to my question, so here it goes...I have 3 CCs 1) CL of $3K/BAL of $1.5K - paid off every month, 2) CL of $500/BAL $300 - paid off every month and 3) CL of $300/BAL $250 - paid off every month.

I was told that you don't want to have too high a CL as it shows lenders you have a lot of AVAILABLE credit.  My question is...since #2 and #3 CC have such low CLs, my usage of available credit is well over 70%.  Would it be smart to increase my CLs on them to decrease usage %?  I use one for gas and the other for groceries that never go above $300 each.  I can easily raise each of them to $2-3K each if I requested it.

Please let me know your thoughts.  Thanks!

[Tons_of_Debt]

You could definitely request CLIs, but would most likely receive in INQ as a result. Which banks are they with?

You could also pay them throughout the month so as not to carry such a high balance...

[Anonymous]

The one I use for gas is a Discover card and the other is a Chase Platinum.  I intentionally asked for low CLs because I knew that I would only use them for for food/gas and was concerned of a high cumulative CL.  After reading the threads on UTI now I think I made the wrong move.

[Anonymous]

The only time I've ever heard of a lender saying you have too much available credit was a home loan situation. I suppose it's possible if you were applying for any new credit and had 'too much' available open credit, you could be denied, but you have a total of less than $5k.

Definitely go for the CLIs to lower UTIL.

Message Edited by gordonbs on 08-08-2008 07:48 AM

[KingAdrock]

"Too much available credit" can be a derog; but this is very, VERY rare. You'd likely need open credit of several tens of thousands of dollars for that to ever happen. It really isn't something to worry about. Even in the unlikely event it does happen, you can always call a lender and ask for a credit limit decrease.

[Anonymous]

Thanks guys!  Now what if I increase my CLs and then it triggers an "INQ"?  I asume that means inquiry but how does that affect my score?  Is it worth taking the chance?  Would it make a difference if I chose to increase one at a time and spread out the increases vice ask for increases to all my CCs?  Please let me know and thanks again!

[Anonymous]

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kesln8r wrote:

Thanks guys!  Now what if I increase my CLs and then it triggers an "INQ"?  I asume that means inquiry but how does that affect my score?  Is it worth taking the chance?  Would it make a difference if I chose to increase one at a time and spread out the increases vice ask for increases to all my CCs?  Please let me know and thanks again!

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Chase will always pull a hard inquiry when you request a CLI.  Discover sometimes will, but usually will only pull a soft.

A single inquiry only dings the average score for 2-5 points or so, depending on how many other inquiries you already have reporting.

Inquiries stay on your reports for two years form the date of the inquiry, but only affect your FICO score for one year.  After the one year is up, FICO ignores them completely, although they will still be visible on your reports for another year after that.

Inquiries are a minor concern in the grand scheme of things.

FWIW, spreading them out only draws out the time that the last one will report.  The sooner you request your CLIs, the sooner the associated inquiries will stop hurting your score.  I would suggest that you request both of them at the same time.  As I said above, you probably won't even get a hard inquiry from Discover anyway.

[Anonymous]

OK, thanks again for your advice.  You've all been very helpful!