How much UNUSED credit line is too much?

[Anonymous]

My wife and I recently paid off our entire nearly maxed out collection of credit cards and other accounts (except, of course, our mortgage).  When we were rejected for credit or had our requested amount reduced, it was solely based on the amount owed, not on lateness or anything else obviously negative.  We still have almost the same amount of available credit as before, except that it's now unused.

The document "2008 Understanding Your FICO Score.pdf" says nothing about available credit and its impact on the score, but our financial advisor claims that we should reduce it substantially.  On the other hand, Trump University seems to suggest that the more available credit, the better.  Is there any threshold and, if so, is it based on income?  If so, what percentage of annual income is optimal, what kinds of income are considered, and which, if any, don't count?

[Junejer]

Hey gamphd, welcome to the forums. Please read Credit Scoring 101, if you haven't already. The document doesn't address it, because it's not a factor in the scoring system. Perhaps your FP was stating so, because of the fear of you all running the credit up. There is absolutely nothing wrong with having a lot of available credit, particularly if you are disciplined about how you use it. In fact, if you have low balances (numerator) and high limits (denomenator) your scores are going to soar, if all other things are in line.

[WannaHouse]

There really is no such thing as too much unused credit. You want high limits, but you only want to have balances on 1/2 your cards, and then only 1-9% of your available credit.

Rotate your cards, make small charges monthly, and pay it off monthly. You can leave a small balance if you want to. This should help to maximize your scores.