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Does Average CL Matter for score?

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CostantinoA
Established Contributor

Does Average CL Matter for score?

I have alot of cards with CL ranging from $100.00 to $3500.  I know I need to let my accounts grow and that is what I am doing.  My question is, does the low limit cards hurt your score? I have 0 balance on them.  I know if I cancelled them, it would affect my debt ratio but would I see more of an increase to cancel the $100.00 card than I would lose?  

Experian - 695 (4Y1M AA, 33 INQ)
Transunion - 686 (1Y5M AA, 30 INQ)
Equifax - 726 (3Y1M AA, 4 INQ)
Total Credit Lines: $99,387
Message 1 of 7
6 REPLIES 6
JLK93
Established Contributor

Re: Does Average CL Matter for score?

Average CL isn't a factor in FICO scoring.

Message 2 of 7
iv
Valued Contributor

Re: Does Average CL Matter for score?

Not for FICO scores... but it does matter for some insurance scores.

EQ8:850 TU8:850 EX8:850
EQ9:847 TU9:847 EX9:839
EQ5:797 TU4:807 EX2:813 - 2021-06-06
Message 3 of 7
Anonymous
Not applicable

Re: Does Average CL Matter for score?

What iv just said.

 

The LexisNexis Auto Insurance model, for example, has a whole family of reason codes associated with average credit limits for major credit cards.  Click here and scroll down, looking for codes 3030-3038.

 

https://consumer-solutions.custhelp.com/app/answers/detail/a_id/2523/~/how-do-i-learn-more-about-sco...

 

You'll see that you get penalized for having an average credit limit of less than $10,533.

 

You also get penalized by LN for every store card you have, which would in your case (18 store cards) be your greater concern.  But as iv says, there is no FICO penalty for low ACL or the presence of store cards.

Message 4 of 7
Anonymous
Not applicable

Re: Does Average CL Matter for score?

Low credit limits don't hurt FICO scores.  I have bunch of teenagers / early 20-somethings that work for me with credit scores in the mid-high 700's, even a few at 800 and most have 1-2 cards, 3 at most and most of their limits are $300, $500, a rare $1000.  

Message 5 of 7
Anonymous
Not applicable

Re: Does Average CL Matter for score?


@CostantinoA wrote:

I have alot of cards with CL ranging from $100.00 to $3500.  I know I need to let my accounts grow and that is what I am doing.  My question is, does the low limit cards hurt your score? I have 0 balance on them.  I know if I cancelled them, it would affect my debt ratio but would I see more of an increase to cancel the $100.00 card than I would lose?  


For what it is worth, a great goal to strive for is one where cancelling cards has no bad effect on your CC utilization.  (I think this is what you mean by debt ratio.)

 

I have a lot fewer cards than you do (maybe ten?) but I could cancel eight of then tomorrow and I'd still be in the same 1-9% utilization category.  That's a good place for you to aim for too.  That boils down to the advice to aim for paying off all your CC debt.

Message 6 of 7
Anonymous
Not applicable

Re: Does Average CL Matter for score?

Correct.  If you use your credit cards the way you would use a debit card (just with 1 additional step) you'll never have a problem.

Message 7 of 7
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