@Anonymous wrote:Hey There all!
New to the forums. I've been trying to improve my credit over the past year (and making progress whooo!). I've been planning a trip recently and went ahead and got a BankAmericard Travel Rewards Credit card with a 10k CL. However, I've been banking with BoA for quite a while and actually have had a credit card with them for 8 years now (my oldest credit card actually) which has a 5.5k CL.
Now, I have an understanding that longevity of Credit cards plays a role in my score, so I don't want to close down this account. However, I was wondering if there is any effect in transferring over my credit line so I only have $500 in my first card and 15k in my travels card. Will doing this effect my score negatively in any way? My thinking is even though I have an old card, it would negatively effect my score due to having such low credit on it?
Thanks!
Welcome to the forums!
Some lenders allow you to move limits around, but I don't know if BOFA is one of them.
Yeah closing the card is not what you want to do; if you can reallocate there's no affect on FICO directly (since it's all percentage of utilization based, individual and aggregate, you just have to manage your reported balances now on that $500 card more zealously when it matters).
Lots of posts on balance reporting and management, moving the limits around though won't do anything negative to your score other be more awkward in the utilization calculation and you can manage that easily enough to not affect your score.
@Anonymous wrote:Awesome, thanks for the fast reply! Puts my mind at ease, now I just need to contact BofA to see what they can do about it.
Side question: Am I reading correctly that utilization breaks up into two factors, utilization per card and a summation of total debt/total credit? Interesting, Been paying off all my cards one by one, but still have one with incredibly high utilization, hopefully I see a nice bump in credit score after I knock this last credit card out of the way. Man, it feels good to finally be crawling out of credit card debt.
Hey congrats on that! Yeah, you're reading it right if we're talking summation of total revolving debt / total credit limit (installment loans like mortgages, auto, personal, student factor differently). There's even a third factor of number of revolving tradelines reporting a balance, vs total number of revolving tradelines. 3 parts to the revolving utilization portion of the FICO algorithm.
Which leads to the general advice, if you have to optimize your score before an application, leave a small balance on one card and the rest at zero, and that's really darned close to optimal for virtually everyone. All balances being zero is a negative as a heads up too.