Hello MyFICO Gurus:
There are two existing cards -- a BofA Platinum Plus and Chase Sapphire. I requested the CL of the BofA card to $5k, and it was approved. Of course, I took a hit due to a BofA required hard pull. Now, I was thinking of requesting an increase on the other card. Chase informed me I will also take a required hard pull.
(1) Will increasing CLs -- essentially doubling available credit -- result in a FICO increase?
(2) Will the FICO increase from gaining more available credit outweigh any hit from hard pulls? (Well, is there a FICO increase from extending credit?)
(3) Is it better to do it all in one day or separated by some period of time? Days? Months? Year?
Current FICO before changes topping 710 with two cleared PR liens. No debt except re-fied student loan. No other negs.
Thanks, and I wish I could help you all, too! Any info is so much appreciated.
1. Increasing CL affects your FICO score only to the extent it effects your utilization percentage. There is no weight given to credit limits per se. For FICO, it is just your utlization.
2. Based on the fact that you are saying you have no debt, it appears it would not affect your utilization, so you would not see any FICO increase to offset the hit from the hard pull. You should expect to lose a few points for the hard pull.
3. Probably doesn't matter when you do it. Do you have any large purchases, home or auto, coming up? Do you have a lot of other inquiries?
The CLI will live unless later changed, and thus will continue to have benefit. The affect of any hard inquiry goes away in one year.
If you dont anticipate apping for new credit within the next year, the inq. impact will be gone, and is thus only academic.
Increased CL will provide more spending capability with less future scoring impact, as the same amount carried as a balance each month will represent a lower % util.
That lives past the impact of the inquiry. Plus, it demonstrates to future creditors doing a manual review of your CR that other creditors have assumed the risk of granting you higher debt flexibility on their accounts.
In my opinion, the longer term benefits are clear. Eat the inquriy for a year, and use the higher CL wisely.
Thanks for the info Walt. Really appreciated.
To answer your questions: I may have an auto purchase coming in the December timeframe. Then hopefully a home purchase possibly in Spring. And, no other known inquiries, though I wouldn't mind asking for an AMEX card sometime soon.
Is this too much?
If you're trying to purchase a home in the Spring, I'd probably hold off on adding another credit card. Asking for the CLI probably wouldn't kill your home purchase, but if you don't really need it, you may want to hold off on that as well. No inquiries for at least 6 months before a mortgage application is a generally good idea, some will say you should hold off even longer.
Also, unless you really need that car in December, you might want to think about getting the car after the house. Again, with your scores, it's probably not a deal killer. But you'd want to watch your reserves, and watch your DTI. Also, if you are planning on going conventional, by adding another tradeline so close to the mortage app, you'd lose some points for the inquiry as well as the new account and lowering of your average age of accounts. It might not mean the difference in approval or no approval, but it could mean a worse interest rate.