practical value of a huge credit limit?

[909]

I do have an Amex BCE with a $50K CL my other CLs are 18, 10, 9.25, 9, 9, 2.

What would the test look like?

[Anonymous]

Do you carry balances on any of your cards?  If so are they small enough that you could pay all but one of them down?

[Anonymous]

If you would, answer the question that BBS asked you just now.  He's been following this closely and he knows where I am going on this.

But here the big idea.

Basically, if a person has multiple cards, with one of them being at 50k (say)....

     * He keeps all cards reporting $0, except for the 50k card and a smaller card (e.g. 10k).

     * He gets each of those two cards reporting a small balance ($100 say), waiting until he's sure the CRA reports are updated.

     * He pulls his three FICO 8 scores (e.g. with Credit Check Total).

     * He pays the 10k card down to $0 leaving just the 50k card reporting. 

     * He waits till he is sure the new balances are reporting (all zero except the 50k card),

     * Then he pulls his three FICO 8 scores again.

We can modify that test (as described above) if it would be financially burdensome for you to pay off nearly all your CC debt.  It's not essential to the test working.

And although this is probably obvious, when I refer to the 50k card and the 10k card above, that's shorthand for "the card with the 50k credit limit" and "the card with the 10k credit limit."  It doesn't mean that these are cards that have a balance of 50k or 10k.

[Anonymous]

909,

What CGID is trying to determine is whether or not the $50k credit line that you possess is counted into your aggregate utilization under the FICO scoring algorithm.

If all of your cards have $0 balances except 2 (with small balances, say $100 as CGID suggested), one of the two being any card you want and the other being the one with the $50k limit, your FICO scores [with respect to the utilization sector of scoring] will be maximized.

If you then take the one card that has a balance (not the $50k limit card, the other one) and pay it off and let it report a $0 balance, your only card with a balance will then be the one with the $50k credit line.

If your scores stay the same, FICO is seeing the $50k card as part of your overall utilization.

If your scores drop, say 15-20 points on average, FICO is not counting your $50k credit line into your overall utilization and rather is considering that you aren't using your revolving accounts.  Don't worry, though, as those 15-20 points would return as soon as you let any of your other non-$50k cards report a small balance.

[JLK93]

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@909 wrote:

I have no idea if this is helpful...

These are my four most recent myFICO alerts:

11/25 - EX alerts: my Amex BCE CL increased from $20k to $50K; Amex balance increased from $0 to $1025; no change in score (791)

11/27 - TU alerts: my total balance on bank cards changed (new balance is $1134; last alert 2 weeks ago said it was $109; $109+$1025=$1134); Your FICO score has dropped to 780 from 783.

7 revolvers $108K CL, $1134 total balance.

Things that changed: my Amex BCE CL increased from $20K to $50K; my BC balance increased from $109 to $1134; I now have balances on two cards ($109 and $1025)

I can't draw any conclusions but perhaps y'all can?

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909,

Which card has a balance of $109?

It would seem that if you paid off the $109 balance, then your only remaining balance would be the BCE, which has a credit limit of $50K. The BCE balance should not be included in overall utilization. If I understand your balances correctly, you should see a significant drop in FICO scores once the $109 card reports as zero. It would be very interesting to see the results.

In any event, I'm fairly certain that $50K cards are not in included in overall utilization for FICO 8 and FICO 04. FICO 98  probably draws the line at either 35K or 40K. I have a 35K card, so, I may be able to test the FICO 98 boundary in 2 or 3 months.

BTW, TU alerts seem to separate bankcard balances from store card balances. So, the TU alert would not necessarily refer to total balances. Do you have any balances on store cards?

[Anonymous]

Yup.... that's it!  Thanks BBS.

[Anonymous]

909, does this sound like something that you'd be able to / willing to try?

[Anonymous]

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@Anonymous wrote:

909, does this sound like something that you'd be able to / willing to try?

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Hey BBS. I really hope that 909 is willing to do this for us.  If not, however, I suggest that this weekend you and I put this together in a new thread that just summarizes quickly what the issue is and solicits help from anyone in the community who has a card with a CL greater than 34.9k.  At this point in the current thread, the "asking for help" can only be seen after someone reads 100 previous posts.

The general feeling I am getting is that the breakpoint could be anywhere between 35k and 50k, with a greater likelihood of 50 than 35.  But without test data we just don't know.  I think Credit Check Total would be really nice as the testing tool since it would give us the ability to distinguish between the different CRAs, all pulled at the same instant.  Maybe the breakpoint is also CRA dependent, right?

[Anonymous]

That very well could be the case.  Pulling 3B scores with CCT though would be great for testing purposes.  Agreed that a thread should likely be started targeting those with a $35k+ credit line that would be willing to do a utilization test.

[909]

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@JLK93 wrote:

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@909 wrote:

I have no idea if this is helpful...

These are my four most recent myFICO alerts:

11/25 - EX alerts: my Amex BCE CL increased from $20k to $50K; Amex balance increased from $0 to $1025; no change in score (791)

11/27 - TU alerts: my total balance on bank cards changed (new balance is $1134; last alert 2 weeks ago said it was $109; $109+$1025=$1134); Your FICO score has dropped to 780 from 783.

7 revolvers $108K CL, $1134 total balance.

Things that changed: my Amex BCE CL increased from $20K to $50K; my BC balance increased from $109 to $1134; I now have balances on two cards ($109 and $1025)

I can't draw any conclusions but perhaps y'all can?

---

909,

Which card has a balance of $109?

It would seem that if you paid off the $109 balance, then your only remaining balance would be the BCE, which has a credit limit of $50K. The BCE balance should not be included in overall utilization. If I understand your balances correctly, you should see a significant drop in FICO scores once the $109 card reports as zero. It would be very interesting to see the results.

In any event, I'm fairly certain that $50K cards are not in included in overall utilization for FICO 8 and FICO 04. FICO 98  probably draws the line at either 35K or 40K. I have a 35K card, so, I may be able to test the FICO 98 boundary in 2 or 3 months.

BTW, TU alerts seem to separate bankcard balances from store card balances. So, the TU alert would not necessarily refer to total balances. Do you have any balances on store cards?

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My Barclay card with a $2K limit had the balance of $109, the AMEX BCE w/ $50K limit had the balance of $1025. All 5 other cards had a balance of $0.
I may have already put the test in motion because after Barclays reported the balance of $109 in mid-November, I paid it to $0. I'll try to keep it at $0 when it reports again around 12/15.

No, I do not have any store cards.