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Total Credit Limit versus Income ?

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Senior Contributor

Re: Total Credit Limit versus Income ?


@Revelate wrote:

. whenever we have a downturn I'm expecting to get half of them whacked

I've thought about that too.  

”MY TAKE HOME PAY DON’T TAKE ME HOME”
Message 21 of 54
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Senior Contributor

Re: Total Credit Limit versus Income ?

If ratio's even mattered, I would imagine income would play into that as well.

”MY TAKE HOME PAY DON’T TAKE ME HOME”
Message 22 of 54
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Community Leader
Super Contributor

Re: Total Credit Limit versus Income ?

No need to CLD yourself. If those lenders want to pull back on exposure, they'll do it.
You may be over thinking it a bit.
I'm no Big Bank Hank either. lol
As long as you don't have a lot of new apps close to the refinance, you shouldn't have any issues.
If you were talking auto loan refinance.
Then it doesn't matter at all.

Keep enough lenders in your back pocket, so that you have options.
If I haven't learned anything else from the credit game. It's never depend on a single lender as though your life depended on it. There are way too many out there that want your business, to do that.



My most prized tradeline.
Message 23 of 54
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Senior Contributor

Re: Total Credit Limit versus Income ?


@Gmood1 wrote:
No need to CLD yourself. If those lenders want to pull back on exposure, they'll do it.  I changed that stmt.  I didn't mean for it to sound that way.


Keep enough lenders in your back pocket, so that you have options.
If I haven't learned anything else from the credit game. It's never depend on a single lender as though your life depended on it. There are way too many out there that want your business, to do that.  Agreed!
”MY TAKE HOME PAY DON’T TAKE ME HOME”
Message 24 of 54
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Established Contributor

Re: Total Credit Limit versus Income ?


@GApeachy wrote:

@Revelate wrote:

. whenever we have a downturn I'm expecting to get half of them whacked

I've thought about that too.  


I've only seen this sentiment on this forum and frankly it suggests that people suspect they have outsized credit not supported by their spend or income and that it's just a house of cards.  Kind of a weird way to live, having the sword of Damocles hovering above (mixed metaphor) yet continuing to seek ever more credit (not @Revelate per se, but others), but I guess to each his own.

 

@GApeachy, I don't believe cutting credit limits of people who have not shown any financial distress is standard operating procedure for banks.  Maintain your payment pattern (i.e. keep paying in full if you've always paid in full).  You can lower your spend, which is a prudent thing to do, but always maintain your payment pattern. 

 

During the height of the great recession and apparent credit tightening, in the middle of a cross-country move, I forgot to pay my credit card.  One day past the due date, I called Chase to pay my over $20k balance in full.  Not only did Chase not cut my limit, but the rep waived the late fee and accrued interest.  So I think as long as you've not shown any signs of being financially stretched across all your accounts, the banks will ignore you and let you be.

Message 25 of 54
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Senior Contributor

Re: Total Credit Limit versus Income ?


  • @tacpoly wrote:


    I've only seen this sentiment on this forum and frankly it suggests that people suspect they have outsized credit not supported by their spend or income and that it's just a house of cards.   

  • I have read articles suggesting banks may do this to prevent the catastrophy from the last time. That's not the reason for this thread.  But....I have read articles and seen on tv to expect cld's by banks as a safeguard.  But no, there's no outsize or unsupported anything that gives pause.  All I want is optimization if there is any requarding preparation for refi.  Through search here found the thread about Ratio...thought hmmmmm. That's all.  My spend is always under 6% so that part is good.

 

 

”MY TAKE HOME PAY DON’T TAKE ME HOME”
Message 26 of 54
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Moderator Emeritus

Re: Total Credit Limit versus Income ?

Forwarned is forearmed is my thinking Tacpoly.

I have seen others over the years have lender swipe their limits or accounts even in today’s loose UW world. Notable example was Cap 1 which pared back a bunch of limits at 25k and higher anecdotally.

I had done a strategic CLD to 10K on my own Cap 1 tradeline and didn’t get touched.

There are algorithms which go hunting for various consumers that are either risky or probably unprofitable. It has been years since I needed more than 10K on even a default spender in any given month, and as a result that is a tradeline that not only works for me but isn’t outsized.

I have too many accounts for my use case, I can’t argue that at all. Chase is unlikely to screw with me as they know I can go right across the street to BOFA and I am in both of their new target demographics... but when it comes to tradelines that are unlikely to get taken away short of a BK Cap 1 rates highly there and playing needle in the haystack is a good defensive strategy in my opinion.

Attempting to channel the credit force vs the evil algorithms: I am not the consumer you are looking for.



        
Message 27 of 54
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Valued Contributor

Re: Total Credit Limit versus Income ?

My total CL is < 50% of income ( I believe it is plenty) .    Smiley LOL 

(Income / 2) / # of cards = Per Card CL

 (0.4: 1)   -- Just to balance the other posters

 

FNBO 2% Cashback Visa (20k) / Bank of the West Cashback MC (20k) / US-Bank Cash+ (15k)
FNBO Travel Elite (15k) / Citi Double Cash (20k) / US Alliance 3% (20k)
Ficos : 830 / AAoA : 9 yrs / AoOA : 24 Yrs / AoYA : 0
Message 28 of 54
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Senior Contributor

Re: Total Credit Limit versus Income ?


@Kforce wrote:

My total CL is < 50% of income ( I believe it is plenty) .    Smiley LOL 

(Income / 2) / # of cards = Per Card CL

 (0.4: 1)   -- Just to balance the other posters

 


Cover your eyes youngin'sSmiley Mad.....a four letter word is coming. Smiley Surprised  ((((( M A T H )))))) Smiley LOL

”MY TAKE HOME PAY DON’T TAKE ME HOME”
Message 29 of 54
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Super Contributor

Re: Total Credit Limit versus Income ?

Definitely impressed with the member seven times their income. I remember reading in another thread someone who had six times his income I wonder what the largest is.
For a collection of our current FICO scoring wisdom, updated as we learn, read the following. Watch the revision dates on the bottom of the first 8 posts as they are regularly updated: Link to Scoring Primer.



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Updated Oct 2020, unless otherwise noted.

(Forgive typos, mobile.)(Everything said is Just IMHO.)

In order to better answer your questions and record your DPs, please provide your profile stats: Any baddies? Severity and recency? (clean/dirty), Number of accounts, both open and closed on CRs (thick/thin), AoOA? (Mature/young), AOYRA-Age of Youngest Revolving Account (new accounts/no new accounts)? Open/closed loan on CR?
For example, mine is clean/thick/mature/new account, with open loan on record.
If you don't know where you fall, just detail any baddies, your number of open and closed accounts, AoOA, AOYRA and whether you have a loan on record to start.

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Message 30 of 54
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