Credit increase question

[Anonymous]

I have a secured CC for $300 and have a high utilization of $286 when it was last reported. I have perfect payment history on this card.
I just paid the balance down in full, and raised my secured limit to $2,000.

Am I looking at a score jump?

[thornback]

Yes, but not from the CLI.   You will regain points lost from reporting a high balance  -- but that's just from paying the $286, not the CLI.  You would have received a boost whether or not you increased the limit becasue you'd be dropping down from 95% util. 

NOTE: IF this is your only revolving account, you don't want it to report $0 balance to the bureaus.  You will incur a scoring penalty for 'no revolving credit usage' which will negate any potential increase from lowered util.   Always allow at least one card to report a small balance below 8.9% of it's limit. 

A CLI only results in a score increase if the increased limit reduces your overall utilization.   IF you have other cards that are reporting balances,  and your current overall utilization is above 8.9%, then the CLI may provide a boost depending on how much it drops your overall utilization.  You have to cross utilization thresholds in order to reap scoring benefits of a CLI.

Welcome to the forums. 

[Anonymous]

Thank you for the input.

Since the CC is still reporting the high utilization, I used the simulator tool , and it shows a score jump with it ALL paid off. Am I wrong her? Do I need to through 10 bucks on there before it reports on Monday?

[thornback]

Yes, throw a small charge on it and leave $5 or $10 to report on the card.  Simulators are guesstimates and not considered wholly reliable; they do not seem to account for the 'no revolving usage' penalty.   All zero balances will result in a scoring penalty - this is a known and well documented  - you can search the forums for threads on the topic.   It even shows up as a "factor hurting your score" reason code.

You can test the all zero penalty yourself.    Not this time around, but the following month after letting the card report $5 or $10,  let it report $0.  This will allow you to see the effect of just going from a small $5 / $10 balance to a $0 balance.      *If you try it now you won't be able to determine how many points you lose from being all at zero and how many you gain from reducing your util because both will be happening simulataneously - -so that's why I say wait to test it til after you report your lowered util.

The loss of points due to all zero balances is temporary however, as points will be regained once the card reports a balance the following month.    

[thornback]

Oh... perfect timing..    a new thread on an 'All Cards at Zero' points loss just posted.. 

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/All-cards-at-zero-32-37-points/m-p/55667...

[Anonymous]

Ok, I will through $10 on the $2000 limit.

This is my only revolving line. Still a good idea?

[thornback]

Yes.    No revolving credit usage means that if you only have one card, and that one card reports zero,  you will be penalized for having no revolving credit usage.   If you have 10 cards, and 10 cards report zero, you will be penalized for having no revolving credit usage.  

[Anonymous]

Just put $10.78 on the card.

Hopefully that will show some improvements

[Anonymous]

It will. To be clear, having it at zero would show improvements too, for the reasons above - you’re going from 90%+ utilization to zero, crossing several scoring thresholds.

But by reporting a small balance, you’ll see even more gains because you’ll avoid the “no credit usage” penalty.

[Remedios]

Call me crazy, but if OP only has one revolving account, there is no possibility of AA by other lenders. 

They can use card naturally, wait for the statement to cut, then pay.  With a single card, individual and aggregate utilization are one and the same. Staying under 28.9% would work just as well without micromanaging every penny 

I understand the fear of balances early in rebuild, it's normal and natural that rebuilders want to be on their best behavior,  but I sometimes feel we traumatize everyone with AZEO/Report Small Balance.

Use card(s) and pay it on time (set up autopay as a back up). Micromanage before important apps. 

Just my several cents lol