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What is too much credit?

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BenTramer1978
Regular Contributor

What is too much credit?

So I recently got approved for a couple cards so my overall credit with all cards combined is about to double and I don't make a lot of money. However I do keep it at 2% utilization. So im asking in general at what point do you start making lenders nervous and start turning you down? How much credit should you have in comparison to how much you earn? 

Message 1 of 19
18 REPLIES 18
FireMedic1
Community Leader
Mega Contributor

Re: What is too much credit?

Theres really no set amount on how much credit you can have. I'm almost doubled my yearly income. And it will go up once my BK drops. Some on here have 5-10 times more than income. FICO doesnt look at income. Lenders do. If you can handle responsible usage of what you have. It really doesnt matter how much credit you have. Lenders do look when it comes to how much of a SL they will give you compared to income. Years ago I thought the same thing and turned in over 10g's. But learned on here afterwards it didnt matter. Now I kick myself I did that. But dont fall prey and run up debt you cant pay thats 2-3 times more than you make. The ole saying. If you cant pay it dont charge it.


Message 2 of 19
tcbofade
Super Contributor

Re: What is too much credit?

How much is too much according to who?

 

DW and I have roughly $600k in available credit.  (I'm on the wrong PC to verify that.)  Roughly six times our annual income.

 

A few credit unions have denied us for "too much available credit"  (DCU and Mainstreet come to mind), but most of the big banks don't seem to mind.  Wells Fargo denied me earlier this year for "too many credit card accounts", so it DOES happen, but it's rare.

 

 

04/01/24 Fico 8: EX 763, EQ 799, TU 783.
Fico 9: EX 756 03/13/24, EQ 790 02/04/24, TU No idea.

Zero percent financing is where the devil lives...
Message 3 of 19
FireMedic1
Community Leader
Mega Contributor

Re: What is too much credit?


@tcbofade wrote:

How much is too much according to who?

 

DW and I have roughly $600k in available credit.  (I'm on the wrong PC to verify that.)  Roughly six times our annual income.

 

A few credit unions have denied us for "too much available credit"  (DCU and Mainstreet come to mind), but most of the big banks don't seem to mind.  Wells Fargo denied me earlier this year for "too many credit card accounts", so it DOES happen, but it's rare.

 

 


+1....side note. Dang @tcbofade Sweet!


Message 4 of 19
BenTramer1978
Regular Contributor

Re: What is too much credit?


@tcbofade wrote:

How much is too much according to who?

 

DW and I have roughly $600k in available credit.  (I'm on the wrong PC to verify that.)  Roughly six times our annual income.

 

A few credit unions have denied us for "too much available credit"  (DCU and Mainstreet come to mind), but most of the big banks don't seem to mind.  Wells Fargo denied me earlier this year for "too many credit card accounts", so it DOES happen, but it's rare.

 

 


According to lenders. I just didn't want to get any of my cards shut off or have problems getting the couple that I still want. But im glad to hear im not in danger.

Message 5 of 19
tcbofade
Super Contributor

Re: What is too much credit?

...and that might vary from lender to lender.

 

As long as you don't start maxing out cards or having late payments, I don't believe that you're in any danger of having existing accounts closed.

 

Some very conservative lenders may balk at giving you MORE credit, but most don't care.  Keep your utilization down and your scores up and you can keep adding until you're content.  

 

...and DW and I have $642k in available credit.  Y'all made me look!  Smiley Happy

04/01/24 Fico 8: EX 763, EQ 799, TU 783.
Fico 9: EX 756 03/13/24, EQ 790 02/04/24, TU No idea.

Zero percent financing is where the devil lives...
Message 6 of 19
BenTramer1978
Regular Contributor

Re: What is too much credit?

Ohh yeah I don't have to worry about that, I have gotten very responsible with my credit. I keep my utilization down to 2-3%.

Message 7 of 19
Yasselife
Valued Contributor

Re: What is too much credit?

@FireMedic1 That's a solid advice; *if you can't pay for it, don't charge it* this should be the number 1 rule.






Message 8 of 19
Yasselife
Valued Contributor

Re: What is too much credit?

@tcbofade Could you share how many cards you have? I plan to deal with WF in the future.






Message 9 of 19
SoCalGardener
Valued Contributor

Re: What is too much credit?

As others have said, there are no hard and fast rules about this. All I can add is that since I had to retire early--and my income dropped DRAMATICALLY (from six figures to....a lot less)--I've had no issues whatsoever getting credit. I mean new credit, accounts/banks I did not have previous relationships with. My total credit limit is several times my income (I think it's at 5x right now, but it may be 6x), and that hasn't caused any problems.

 

The important factors are the basic rules of good credit: make payments on time, keep utilization low, never pay just the minimum payment, don't seek credit frequently, etc. Do that and you should be fine!

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Message 10 of 19
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