Credit line increases (referred to here as CLI's) increase your total credit limit across all credit cards. This, in turn, increases your overall utilization %.
Let's say that was the only card you own... (just for example):
@ $300 CL - your ideal 10% utilization would be only $30 or less, carried to statement
@ $2,000 CL - your ideal 10% utilization would be $200 or less, carried to statement
As far as the mortgage loan, a CLI will have no negative effect. This, because Discover increases occur as SP increases. If it were a HP increase, then that's what you don't want the mortgage loan to see. Actually it will more likely have a positive effect because you have increased your available credit and utilization, which in turn lowers your minimum monthly payment on any balances. This helps your DTI ratio.
As long as there are no HP's (whether new apps or CLI's) then no worries for the mortgage loan. I'm currently going through the same thing.
On Deck: No Plans Currently
Shouldn't that be DECREASES your overall utilization percentage?
If you have a $1000 CL a $100 charge would be 10% utilization.
If your limit is raised to $2000 that same $100 charge would be 5% utilization.
Starting Score Jan 2020: EQ: 743 TU: 694 EX: 666
@Journey2019
Technically, yes....I meant "decreases" your overall utilization.
I think my comment was meant to imply that it positively increases your utilization posture. Good point though, I don't want to confuse anyone. Thanks!
@Anonymous wrote:Your wife's concern might have something to do with too much available credit. 2K limit on a card shouldn't be an issue. If you have a ton of cards, it might add some bloat to your unused credit.
+1. That's not even on the radar for "too much available credit." If you had $400,000 of revolving credit available on a $25,000 income or something that is where it would be more likely to be an issue.
In my opinion, credit limit increases (resulting from a SP) are never a bad thing, and always a good thing. The only exception to that, that I can think of, is if someone has poor self-control and immediately uses the new credit limit to buy stuff they can't immediately pay off.
Higher credit limits mean that, assuming your balance doesn't change, you're using less of your available credit, which substantially improves your credit rating.
Theoretically, there is such a thing as having "too much" available credit, which can hurt your chances of approval for things, but most people are nowhere near that point. Usually that would require many 10's, or even 100's, of thousands of $$ in available credit. At $2k, you're fine.
Total Loan Balance: $43k / $65k
Total SL: $78k