Lower High Credit Line?

Anonymous · ‎09-14-2009

So I finally succumbed to the ubiquitous “Do you know your credit score?” advertising and signed up for myFICO’s quarterly monitoring. Turns out everything looks in order – TU score is 777 – the only negative stated is “You have too many credit accounts”. I have 25 accounts but most are old and closed. I guess they remain for 10 years and there not much I can do about it except let time pass.

Anyway, now that I’ve joined I’m surprised at how active these forums are! Seems some folks are quite absorbed with monitoring / polishing their scores. My biggest concern is/was accuracy of the information, as well as your thoughts regarding a debate I have with my wife which maybe you can help me with:

My BOA card has a CL of $53,100. My wife thinks this is dangerous in the event of identity thief / fraudulent use. She would like me to request a lower CL. I was going to do this but via this valuable forum, I learned there is a credit utilization component to FICO scoring so now I am hesitant to make the request. I can explain the utilization factor to her but an outside opinion may also prove useful.

Thanks for in advance for any thoughts you may have.

Message Edited by Sebago on 09-14-2009 12:06 PM

Anonymous · ‎09-14-2009

CCs count about 1/3 of your scores. UTIL = Total CL from all CCs and total use on all CCs. FICO likes to see total UTIL under 10% and likes to see several CCs with Bal $0.

In case of ID THEFT...You would notify the police and have a report. This report is sent to the OC and to the CRAs. You are not responsible for any charges that you did not make!

Anonymous · ‎09-14-2009

So I can tell her there is nothing to worry about since we are not responsible for any unauthorized charges and that the high CL is a good thing based on the resultant low utilization .

Let me know if I'm missing something, otherwise - Thanks for responding!

smallfry · ‎09-14-2009

Sebago you don't want those old closed accounts to fall off your report that is the body of your score. Average Age of Accounts both open and closed is very important. How much do you charge is a normal month and what is your total available credit? My account has trimmed cardsd and credit limits to dodge possible ID Theft. In a perfect world you have no liability but if not handled correctly they can play games with you.

Anonymous · ‎09-15-2009

In an average month we charge between $3,500 & $4,000 between 2 cards since most all of our expenses are paid via CC . We are fortunate enough to be able to PIF each month. In total we have 5 CC (2 are merchant cards). The combined CC CL is $95,950. Again, my wife thinks this is way too much available credit but based on HappyDays response, I guess it's okay.

With regard to AAoA the next one (old mortgage) falls off in 12/2010 and although you stated "you don't want old closed accounts to fall off your report", I don't see how there's anyway to avoid it.

Thanks

Jazzzy · ‎09-15-2009

@Anonymous wrote:
So I finally succumbed to the ubiquitous “Do you know your credit score?” advertising and signed up for myFICO’s quarterly monitoring. Turns out everything looks in order – TU score is 777 – the only negative stated is “You have too many credit accounts”. I have 25 accounts but most are old and closed. I guess they remain for 10 years and there not much I can do about it except let time pass.

Anyway, now that I’ve joined I’m surprised at how active these forums are! Seems some folks are quite absorbed with monitoring / polishing their scores. My biggest concern is/was accuracy of the information, as well as your thoughts regarding a debate I have with my wife which maybe you can help me with:

My BOA card has a CL of $53,100. My wife thinks this is dangerous in the event of identity thief / fraudulent use. She would like me to request a lower CL. I was going to do this but via this valuable forum, I learned there is a credit utilization component to FICO scoring so now I am hesitant to make the request. I can explain the utilization factor to her but an outside opinion may also prove useful.

Thanks for in advance for any thoughts you may have.
Message Edited by Sebago on 09-14-2009 12:06 PM

Did they say you had too many accounts...or too many accounts with balances?

If too many accounts, you're correct...there's nothing to do. Also, that may have been given as a reason simply because there was nothing else lowering your score. Sometimes they grasp a bit for reasons. I have more accounts than that...some open, some closed. I've never gotten that criticism yet. Some of mine are school loans. School loans seem to grow exponentially on your credit report. One loan turns into 3 accounts as they are transferred and consolidated. I have 30+ accounts.

Also, fraud and identity theft are low on our list of worries. We do use credit monitoring, and there are many ways to do that. We would be alerted of a change right away. I also check our balances online quite often. I think monitoring is important. My son did not learn until a mortgage loan officer pulled his reports that one of his cards had been used in Montana to withdraw a $4k cash advance. My son lived in Boston at the time. This was a card he didn't use, and his address had even been changed on the card. It was a mess to straighten out...mainly because he hadn't alerted the cc company right away. Fraud can be reversed...but only if you learn about it and the cc company is notified. Monitoring is important, even if you don't care much about checking your FICO score.

Anonymous · ‎09-15-2009

Hi LynetteM,

Of the 25 accounts, 10 are open of which 6 have balances (Mortgage, HELOC's, Car Loan & CC's).

With regard to monitoring, in the addition to joining myFico, we're now checking our CC's & other accounts online a few times a month.

Thank for your input!

pattycake · ‎09-15-2009

Sebago, you are already a FICO High Achiever, so you've nothing to worry about. Anything above 760 already qualifies you for the best credit products out there, so congrats! A lot of us are working toward that now.

pattycake's FICOs: 6/2/10 - TU: 708; EX: ???; EQ: 749

Anonymous · ‎09-15-2009

@Anonymous wrote:
CCs count about 1/3 of your scores. UTIL = Total CL from all CCs and total use on all CCs. FICO likes to see total UTIL under 10% and likes to see several CCs with Bal $0.

In case of ID THEFT...You would notify the police and have a report. This report is sent to the OC and to the CRAs. You are not responsible for any charges that you did not make!

A CC with a $53k CL won't count as part of utilization. It will be scored more as an installement. Somewhere around $40k-ish the CBR's stop counting in the revolving equation.

If you use a CC and run a balance, then this is actually beneficial, since you won't be dinged in uti. However, this means your CL also will not help to "dilute" your other CC balances for utilization either.

Anonymous · ‎09-15-2009

Pattycake - thank you.

As stated in my initial post, I recently checked my CR for the first time because of the nonstop credit score advertising. You would think that at 45+ years I would have already inquired. I'm thankful to learn my credit is good.

My main reason for posting was to ascertain if my wife concerns of having a high CL on one of our CC was warranted. Based on the feedback here, the high CL is a good thing and she (we) need not worry.

It is good to see there are lot of folks diligently working on verifying/improving their individual credit profiles and that there is a community such as this dedicated to supporting those efforts.

Thanks again,

Sebago