How does total credit limit affect score

[Anonymous]

Hey credit experts. Quick question.

I’m just curious how my total credit limit can affect my credit score. Everything I’ve read tells me the same thing, that upping total credit limit will help offset balances and lower utilization, which is obvious. I don’t ever carry any balance, so i’ve aways had 0%, but I was curious that as I add new accounts and strive for CLIs, will increasing my total CL with an already perfect util still raise my score?

Thank for helping a noob, I’ve learned so much from this board!

Thanks!

[Anonymous]

As long as your utilization is very low (< 8.99%) there is no scoring advantage to having a big credit limit.  Here's an example.  Suppose Fred has four credit cards each with a $1000 limit.  Two have balances of $80 and two are at $0.  Then for some reason his four CC issuers raise his limits to $20,000 each.  His FICO score will not go up at all -- not even one point.  That's because his utilization was very low before and it is still very low.

PS.  You mention that you keep your utilization at 0%.  If by that you mean that all your cards report balances of $0, your score is taking a 15-20 point penalty.  FICO doesn't like all cards at $0.  You can remove that penalty by having one card report a small balance (e.g. $5).

[Anonymous]

CGID is right on with his reply above.  OP, it sounds like you're a strict Transactor and like to pay things off right away, not carry balances, not pay interest, etc.  That's a great thing and a sign of healthy credit behavior.  Keeping your utilization low is a great look.  That being said, increased credit limits will not have any impact at all on your score.  Where higher limits help are with those that DO carry balances, especially if they are higher balances on not-so-high limits.  Pushing your limits higher and/or adding new accounts is absolutely fine if that's what you want to do, but it should be for a reason other than score improvement.

[Thomas_Thumb]

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@Anonymous wrote:
Hey credit experts. Quick question.

I’m just curious how my total credit limit can affect my credit score. Everything I’ve read tells me the same thing, that upping total credit limit will help offset balances and lower utilization, which is obvious. I don’t ever carry any balance, so i’ve aways had 0%, but I was curious that as I add new accounts and strive for CLIs, will increasing my total CL with an already perfect util still raise my score?

Thank for helping a noob, I’ve learned so much from this board!

Thanks!

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New credit can hurt credit scores. However, CLIs are often beneficial and only hurt score (short term) if there is a HP associated with a CLI request.

Note: Credit based insurance scores (CBIS) don't look at total credit but, they do look at average CL for all open cards combined. An average CL of $10k or more is best for CBIS. Fico does not look at average CL or total CL as an attribute in scoring.

[SouthJamaica]

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@Anonymous wrote:
Hey credit experts. Quick question.

I’m just curious how my total credit limit can affect my credit score. Everything I’ve read tells me the same thing, that upping total credit limit will help offset balances and lower utilization, which is obvious. I don’t ever carry any balance, so i’ve aways had 0%, but I was curious that as I add new accounts and strive for CLIs, will increasing my total CL with an already perfect util still raise my score?

Thank for helping a noob, I’ve learned so much from this board!

Thanks!

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No, a larger credit limit will not in and of itself help your scores.