Over double the limit, how bad is it affecting my ... - myFICO® Forums

JMCB · ‎08-25-2018

-30 years of credit history.
-No missed payments.
-750ish Fico Score.
-45% Total credit utilization.
-Home Depot Card - $10,000 of $15,000 used.
-Lowes Card - $6,000 of $18,000 used.
-Barclay's - $18,000 of $10,000 used.

Question is, how does over the limit affect your score? My Barclay's card is almost double the limit. How much would this affect my chances of approval of loans or new credit cards. I understand that your not supposed to be over 30% utilization on each card and total cards. So that is also holding my score down. But my Lowes and Home Depot are 0% 3 to 5 year payment plans. So I have no plans of paying them down early. But I'm curious how bad the Barclay's is really hurting my credit. Thank you for any info!

Anonymous · ‎08-25-2018

FICO scoring looks at your highest utilization card and considers that as part of the amounts owed sector of the FICO pie. From a scoring perspective, maxed out is maxed out. Whether you're at a $10k balance on a $10k limit, $15k balance on a $10k limit, $18k balance on a $10k limit etc. from a scoring perspective I don't believe will make a difference. You're taking a hit for your highest utilization account being maxed out, period end of story. While it probably goes without saying, being significantly over your limit does also adversely impact your aggregate utilization, which is King to individual card utilization.

Do you have other credit cards outside of the 3 that you referenced in the original post? My calculations show your aggregate utilization across your 3 cards listed to be about 80%, quite different than the 45% you stated. In order for you to be at 45% aggregate utilization, I'm thinking you must have other cards with low to no balances helping drive that overall number down?

Even though from a scoring standpoint there's probably no difference in being at a $18k balance on a $10k line verses a $10k balance on a $10k line from an individual card perspective, upon a manual review I would expect someone to be a bit more uneasy regarding that profile with $8k in additional revolving debt.

JMCB · ‎08-25-2018

Thank you for the clarification. I would have thought it would have calculated a utilization of 160% or so. So it would have been really bad. But if it's just looking at it as a maxed out card, then I'm okay with that. And I understand a manual review will throw up a red flag. Also, there is a total of 24 open cards on the credit report. Mostly smaller limit cards but have been active for 15 to 30 years. Just never request credit limit increases because they are store cards. Btw, this is a relatives credit profile, just trying to help them out. Thank you for the help!

Anonymous · ‎08-25-2018

I am struck by the fact that the person has 24 open cards with a lot of debt and is seeking to get more credit cards.

Anonymous · ‎08-25-2018

Of all lenders, I would think Barclays would be one of the last to allow an $18K balance on a $10K limit card. We’ve all seen balance chasing lenders in situations like this, but how did Barclays allow $18K on a $10K limit? Not really germane to the original question, but it has me curious.

JMCB · ‎08-25-2018

Barclay's was a 0% 12 month Balance transfer we used for a home improvement. When initially filling out the application, we asked for a $11000 BT from a 15% Line of Credit we have at our local credit union. The LOC allowed us to write a check immediately. Well, something happened with their system and after two weeks, the BT request didn't go through. We called Barclays back and they said it was because of the LOC was not traditional, the payment wasn't going through electronically. So they said we will reissue it with a written check. About 2 weeks later, about a month total into the new Barclay's account, our LOC had two payments of $11,000. I checked my barclays and it showed both payments on my credit card statement and a credit limit of initially $13,000. So our first big statement showed $22,000 out of $13,000. Well, we thought about it for a while and knew they would catch it and cancel one of the checks but we decided to not gamble and not call them. Next month, the statement showed everything the same except our first payment was made. After a few months, they reduced our limit to $11,000. So our whole house remodel was done on 0% offers from Home Depot, Lowes, and 2 BT from Barclay's. Before this house remodel, we owned no debt. $350,000 mortgage paid. 3 new cars paid off in the last 5 years. So now we have paid 12 months on Barclay's and our 0% is up. So we are looking at transferring the Barclay's to another card or cards. So we were curious how bad this will look on our credit report. We have $10,000 cash that we can pay Barclay's Monday, which should bring it down enough to where we should get approved for a new card with a 0% BT. People can be haters saying we are seeking out more debt but our debt load for our whole portfolio is awesome. We have no debt except for this house remodel which was done at 0%. We got lucky and got an extra $11,000 at 0% to play with. That helped out a lot. We just don't like paying fees for anything. And once we get a new card and transfer Barclay's, we will never use Barclay's again. So it will sit as an empty $11000 card on our credit.

Anonymous · ‎08-25-2018

OP—Not hating at all, just curious as Barclays is such a conservative (i.e.-stingy) lender in most instances. I understand how things can get squirly, it happens. So more to your point and original question, I think the maxed out account will soook any manual review. I do think with the overall utilization a manual review is likely. Perhaps another plan would be an installment loan that’ll allow for full payment of all revolving debt (after the $10K payment to Barclays), then an app for a new revolver with a BT. The installment loan won’t likely draw as much scrutiny as the maxed out or nearly maxed out cc and overall utilization. Perhaps a CU or bank with which you already have a relationship. In that way you may pay only a month of interest (maybe none) on the installment loan before obtaining a BT card. Just an opinion and an option, of which you’ll likely get many since opinions are generally free! Best of luck and thank you for the clarification!

JMCB · ‎08-25-2018

Also, if you're questioning the 24 cards, as we stated before, they are mostly store cards. Store cards offer 0% deals or they offer extra off. Like my Bestbuy we use for 0% at Christmas. Our JCPenny, Belk, Kohls, Macy's, Maurices, HSN, Sears, all offer up to 40% off your purchase if you use their cards at checkout. We have had some of these cards for up to 30 years. Like our JC Penny was opened in 1994 and only has a $1300 limit. We have never requested any more limit. We pay all our cards off monthly when the statement comes in unless it's a 0% offer. If it's a 0% offer like at Bestbuy or Home Depot, we take the purchase amount and divide it by the monthly offer. So 12 months at $1200, we would make 12 $100 payments so that way we are not paying off early and we are not paying any fees. Hope that clears up the 24 cards. Almost all are store cards.

JMCB · ‎08-25-2018

Thank you for the advice. We could use our LOC but it would show up on our credit report. So don't want to do that. We could borrow against our Certificate of Deposit and pay Barclays that way or seek out a personal loan. We will research that Monday with the credit union. We know we can get a loan anywhere. We could borrow hundreds of thousands against our house or cars if we wanted to. But we were just trying to make it simple. If we can apply for a new card and BT over the computer in 5 minutes instead of going to the bank and bringing in taxes, we would rather do it from our kitchen. We are fortunate with the whole situation of not having to pay interest or fees. So if it comes down to it, we will go the loan route. But who want to pay extra when you don't have to? Haha. And I only need to worry about Barclays. Home Depot and Lowes are 3 and 5 year 0%. We pay an exact amount to them every month. So we have no plans of paying extra to them. Thank you all for your advice and help!

SouthJamaica · ‎08-25-2018

@JMCB wrote:
-30 years of credit history.
-No missed payments.
-750ish Fico Score.
-45% Total credit utilization.
-Home Depot Card - $10,000 of $15,000 used.
-Lowes Card - $6,000 of $18,000 used.
-Barclay's - $18,000 of $10,000 used.

Question is, how does over the limit affect your score? My Barclay's card is almost double the limit. How much would this affect my chances of approval of loans or new credit cards. I understand that your not supposed to be over 30% utilization on each card and total cards. So that is also holding my score down. But my Lowes and Home Depot are 0% 3 to 5 year payment plans. So I have no plans of paying them down early. But I'm curious how bad the Barclay's is really hurting my credit. Thank you for any info!

Your relative needs to get the overlimit card paid off. It's killing his or her credit.