Which is better? Increase credit or apply for new?

[nickcredit]

I'm trying to improve my score.

I'm considering to either increase my limit with a certain card and or applying for a new card. My scores are 776 TU and 798 EQ. I have no other exisiting debt balances outside of an auto lease.

Option 1) I have a Fidelitty Investments Platinum card for 18 years. It has a limit of $9k and I charge $2k - $8k a month on it and pay it off every month. I earn plenty of money  and with my strong history with them / score I know for sure they'll raise the limit. *My reason for seeking new credit is because I have "high revolving balances" with this card. I want to lower the percentage of revolving balances.

Option 2) I go out and apply for an Amex platinum charge card and or their Delta rewards platinum credit card.

*WHICH WILL IMPROVE MY SCORE MORE? INCREASE IN LIMIT WITH FIDELITY OR APPLYING FOR A NEW CARD WITH AMEX?

THANK YOU!!!  

[pizzadude]

Short Tem --->  Increasing your credit limit ( or paying your balance before the statement cuts ) will lower your revolving utilization and should help your FICO score.

Long Term --->  If you only have one open revolving account then you might consider opening another one or two ~ FICO scoring likes to see several open revolving accounts.   

[Anonymous]

If you are paying your balance in full each month, that is probably hurting you somewhat. FICO wants to see how you handle credit. Carry a balance with utilization between 5- 10% and your scores should improve.

[Jutz]

I agree with both previous posters.  I think a charge card might help if you're just floating expenses.

[nickcredit]

What if I do both? Will that hurt my score significantly? 

[Jutz]

It depends on the rest of your file.  If you have a thin file, an added inquiry and a new account will probably cost a handful of points.  If you have an average file it may only be a couple.

[nickcredit]

Don't know if I'm average or thin.

[Jutz]

I should add, it also depends on what you plan on doing with your credit.  Are you in the middle of closing on a mortgage?  Will you be in the next 6 months?  Are you not in the need of any consumer lending for the next year?  Generally, unless you have a major credit decision upcoming, you shouldn't be afraid to add a good account to your profile.

[nickcredit]

I'll be applying for an FHA loan but their requirements are really low in regard to credit score. BUT I am not aware if score effects FHA interest rates?

[jandj80]

Yes, the better the score the better the rate. However, you are likley in the top tier already. I would not app for new credit if you are going to app for a mortgage soon. Also, as someone mentioned, you should pay that card down to 9% BEFORE the statement cuts, so that the lower balance reports. After the statement cuts, you can pay off or continue to carry the small balance. You should pay atleast 2-3 business days prior to the statement. You would not really need to increase your credit limit to see the benefit of that, but, you could also increase the limit if you already know they will. Plus, many increases in limits only require a soft pull.