Can a credit limit be too high for FICO?

[Anonymous]

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@Anonymous wrote:

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For the oldest FICO models (e.g. the EX mortgage score) the breakpoint is $34,999. 

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Awesome. So I'll do a couple more CLI's and aim to keep the cards under $34,999. So far only Amex has gone over that amount, I wonder if I should contact them and ask them to lower my limit to $34k or some such.

I don't spend $15k/month, not even close. I spend maybe $5k/month, but I put almost all that on my BoA premium and although my utilization overall is very low my utilization on that one card ends up being 20-30%.

I noticed that actually matters. I used to have a limit of $21k on that card and my spending was about 20-23% of the limit. I then called BoA and shifted $10k of limit from my travel card (now un-used) to my premium,  to make it a 31k limit so that my utilization on that card is now more like 15-18% of the total -- and my score went up ~5 points or so as soon as the limit increase reported (days later).

If I ever plan an application for something I will do the AZEO thing to squeeze all the juice I can from the orange, but one thing I've learned is that you can't always plan these things as well as you think. Earlier this year I had to move apartments because my landlord moved himself back into the unit I was renting--and I did briefly consider house hunting instead of apartment hunting. In that case--no time to optimize! Ultimately decided the housing market here in Seattle is too overheated so I'm waiting on that--but it was nice to know my score is "naturally" good and doesn't actually need AZEO if I have to do something in a pinch.

[Anonymous]

I think your plan is fine, though I'd avoid lowering your Amex as long as it is currently under 49k.

I think the probability that you will suddenly need to buy a house and will not have time to adjust your CC balances (i.e. without any warning you suddenly need to shop for a house and finalize the purchase all within a few weeks) is very low.  So low that it is not worth planning for.  If that happens, you will have much more serious problems, e.g. that you have likely made the most important purchase of your life too fast and have saddled with a house that is not right for you.

It's unclear to me what your individual utilization has been and what it is now.  You mention that before raising the credit limit on the BOA it was 20-23%, but that since the CLI you describe it as being 20-30% and also as being 15-18%.

Given the conflicting figures it is hard to know what may have been going on with the score.  If your individual utilization occasionally crossed over 28.99% then yes there could have been a penalty for that which would have been fixed by the CLI.  There should not have been an individual util penalty if the card was consistently under < 28.99% (possible exception might be a person with a balance of > 10k but that's not you).

PS.  Given your spending patterns you would make a lot of money by opening a new card every 3-4 months (a card with a huge signup bonus).  If you made the new card your primary go-to card you could easily get three, four or even five huge signup bonuses a year.  That's just a thought.

[SouthJamaica]

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@Anonymous wrote:

I heard that FICO might start ignoring some cards if the limit is too high. Is there a credit limit that is too high? 

Over the past few years I have been regularly doing CLI's and now I have a number of cards with pretty high limits: Amex 40k, BoA Premium 31k, Discover 27.5k, CITI DC 27.5k, BoA Cash Rewards 27k. 

Should I keep requesting CLI's on these cards or does there come a point where it's better to stop? 

I know if I optimize my score it doesn't matter--I can just pay all but one down to zero and leave the last one reporting a small balance. But I do like that if I just do nothing, let auto-pay cover all my bills, and let all my balances report, that I can still get a 760 score. It's possible in part because the limits are so high that my ordinary spend ends up being a low utilization anyway. 

So I like CLI'ing the cards as far as I can go -- but I'm wondering if older models of FICO will eventually start ignoring some of them, and if so, at what point I should stop asking for CLI's.

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I wouldn't worry about it. If it gets to that point you can always reduce a credit limit or spread it to another card from the same lender.

[Anonymous]

My overall utilization is very low like 5 percent. It's utilization on a single card that can be high. I put most of my spend on my BoA premium rewards card and what I was saying is that when the limit on that card increased from 21k to 31k my score improved about 5 points because as a result of that CLI my utilization on that card decreased from 20 percent to 15 percent or something close to that.

[K-in-Boston]

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@Anonymous wrote:

KiB it seems to me the only way to really test it would be to use the $99k card as your AZEO card and see if you get hit with the no revolving credit use reason statement and score ding.  I'm not sure if that would be easily doable for you though, as it sounds like you've got at least a handful of balances on other cards?

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@Anonymous I'm sorry for the long delay in responding.  I chimed in while on vacation and forgot that I had!  Oops.

AZEO would be nearly impossible right now, yes.  Total revolving balances (including not-at-all-insubstantial new monthly charges) are still close to $100k, which sounds horrific but that was closer to $150k not that long ago.

[K-in-Boston]

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@Anonymous wrote:

BBS was part of the long testing thread for this a while back so he can help you out.

One thought: KIB mentions that he is an AU on the card.  Therefore he should not be the person who tests it.  That is muddying the waters with TWO issues that can cause a card to be dropped.  Best practice for testing is to isolate.

If he has control over the CC balances of his wife (the actual card owner) and the capacity to pull her scores (e.g. via Credit Check Total) that would be the way to go.

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@Anonymous extending the same aplogy to you as I did to BBS for the late reply.

Since it temporarily sits at a $0 balance (it'll get massive BTs moved over to it in Q1), in a perfect world I'd remove myself to see what it does to my scores and utilization.  Unfortunately since all open AU accounts disappeared from my EQ reports, I'm afraid to make any changes to aged cards that I need for AAoA balancing.  DW and I are in full cooperative 2-player mode, though.  She has a handful of BTs on her cards, but for daily use her charges are on the AU cards of either my SPG Luxury or CSR.

[K-in-Boston]

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@Anonymous wrote:

PS.  It would also be good to give BBS as much information about her profile before the test begins.  We'd ideally want to know whether she is in a thin scorecard or a dirty scorecard.  If she has 6+ accounts, has an AoOA of 25 months, and has no derogs, that would be ideal.

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Not sure if it matters now, but not thin at all, never dirty at all, around 30 total accounts including closed, AAoA is 132-144 months depending on bureau, no derogs ever in her life (or mine), total credit age is 26 years or so.  Sounds like we're currently poor candidates for DPs, though.