Effect of credit card approval amount on FICO score

[Anonymous]

First, I want to thank everyone on here who has helped me better understand how to improve your credit score. In April 2010 my Fico was 611...today it is 780 after a 7 point drop. Alot of the increase is from items being close to the 7 years waiting period and then contacting them asking for early deletion.. Plus I have been very frugal and only used a debit card for years. Question: I applied for a credit card last night and did not request a certain dollar amount. They came back within a minute and approved me for a $20,000 limit. I don't need that high of an amount and really was only looking 3-5 K. Will having the large limit at least for me, hurt my score. I will only use the account a couple of times throughout the month and pay it off.

[GregB]

The higher the limit, the lower your utilization with any given balance. So you want a high limit. You don't ever want to lower your limit.

In case that isn't completely clear, do not even consider asking for a lower limit.

[tennisfan78]

Wow, congratulations on the jump in score. Yup, higher limit is better in my opinion as well.

[RobertEG]

The only negative I can see is that having that high limit might induce you into increasing your debt beyond that of what you might have done with a lower-limit card.

If you dont let that limit cause you to substantially increase your debt, it is gravy.  It also tells other lenders that this particular lendor views you as capable of handling higher discretionary debt.  That, in addition to FICO improvement in % util, is also a plus.

[Anonymous]

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@Anonymous wrote:
First, I want to thank everyone on here who has helped me better understand how to improve your credit score. In April 2010 my Fico was 611...today it is 780 after a 7 point drop. Alot of the increase is from items being close to the 7 years waiting period and then contacting them asking for early deletion.. Plus I have been very frugal and only used a debit card for years. Question: I applied for a credit card last night and did not request a certain dollar amount. They came back within a minute and approved me for a $20,000 limit. I don't need that high of an amount and really was only looking 3-5 K. Will having the large limit at least for me, hurt my score. I will only use the account a couple of times throughout the month and pay it off.

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Hi julcreek, what was the annual income you put when applying? Thanks.