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Do low CL's hurt your credit score?

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low limits, in and of themselves, IMO do not hurt your score until the point comes where your 500 limit is in your CR along with your 5K limit. Then it might be a factor.

I think the lower limit cards, you need to really keep an eye out on your utilization %. 1-9% of 500 bucks (the supposedly "high points percentage) is no more than 50 bucks on a 500 limit card.

Low CL card = lower balance card.

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I do trust myself now with credit but have a related question. I am wondering if their is an optimal percentage of your credit that you should always owe or not?

For example, I noticed something that shocked me a couple of months ago. I have a WaMu card and they allow you to continually check your TransUnion score. My score went from a 649 to 636 in one month. The only thing I can attribute it to is a credit on my card. Someone ripped me off, I disputed it and got the money credited back to my card. I already paid them for it so they owed me money.

Does anyone here know of a certain amount or percentage that you should always have on your cards or is this not an issue? It appears it is an issue if they owe you. I wouldn't want to rack up a bunch of credit and screw myself since I have no intentions of going beyond my means. If there isn't an amount, is it a wise strategy to get a bunch of credit and just use the cards once and a while so they don't cancel the card.

WaMu says that it isn't beneficial to your credit to get a card and not use it. Are they lying for their business objectives?

Is there anyone here knowledgeable of this?

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In my o, generally want to keep your utiliztion 30% or below i like to keep mine about 20%.... Well with credit as you know scoring is tricky but a key thing to keep in mind is the more information a creditor can report can be just as positive as it can be negative...i.e. Having a card with $0 balance that you never used doesnt allow the scoring to truly estimate if your a risk or not..... baby step your way with your credit dont try to do everything you read here or see...credit is about discipline, time and knowing what you truly can handle...

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I have a friend that works in finance and he told me that the moment your card reaches 50% of your CL your score goes down. I think keeping your utilization low is a good idea and you should always keep in mind finance charges and fees. I feel comfortable with about 30% as well...

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Another thing to consider and think about when keeping utilization down. Lets say you have 8 credit cards and they range evenly from $5k - $10k. Now if your utilization is at lets say 50%, can you see how much money that is in CC debt already? You're now back into $30k in CC debt and acruing interest every day. Aren't you back at square one for credit repair if you can't pay that off? You're in a safer position getting and keeping those balances back down as low as possible. IMO.

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WaMu says that it isn't beneficial to your credit to get a card and not use it. Are they lying for their business objectives?


A) IMO - I have a stinkin suspicion that the little twerps that figure your credit score look at what you have at your disposal and how responsibly you use it. If you have card and it sits dormant, you have not shown much of an ability to handle credit. If you have several cards available and you show a responsible track record of usage and re-payment, that is where you help yourself to a better rating.

B) If you partake of the extended credit and pay only the minimum every month, you would still show that you are responsible, but, you would ultimately be in a revolving door scenario where your payments would virtually be nullified by the accruing interest on your account. That's where the grantor would like to see you; having to pay "something" for the right to have their card. They don't make much money off of you if you PIF every month. In a sense, it probably costs them money to maintain your account, but they off-set that by the % they charge the merchants to process their receipts.

The "given" here is if you use it and don't adhere to responsible re-payment habits, your score will tank.

You don't have to use it every month and there's no set amount you have to maintain. Use it for a purchase here and there, pay it off a couple of times a year and you'll be golden.

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  • 2 weeks later...


From what I've learned (based on those who have 780+ scores), the key has been:

1. Only reporting a balance on 50% / half of their total available credit accts including LOC, pers loans, auto etc.

2. Having a balance between 1-9% (some say 5% is best?) reported on cc's.

Pls feel free to correct me but my understanding is:

Example: Let's say your credit profile looks like this


Pers Loan

Auto Loan

Store card 1

Store card 2

Credit Card 1

Credit Card 2

Credit Card 3

In total, you have 8 lines of credit/potential debt, therefore only 4 should be reporting a "balance owing".

Those 4 would be:

Mortgage (automatic)

Pers Loan (automatic)

Auto Loan (automatic)

Now you only have 5 cards left to play with, and only 1 ONE should be reporting a balance (1-9%), the other 4 should remain at 0 (which equals to 1/2 of all credit lines). Does not mean you can't use the other cards, but it does mean that you should pay them in full before the balance is reported. Optimally, you would rotate which one credit card reports a balance monthly...

Of course this is not always possible and may be hard for some to do. BUT if you can not avoid only having 1 card report at any given time, then make sure that the additional reported card balances are under 9%.

Sorry, I can't answer your question on actual CL amounts. I *think* low cl's hurt in 2 potential ways:

1. Overall utilization. It is harder/more restrictive to have under 9% reported monthly while only using 50% of your credit lines.

2. "CL ghetto" once you are receiving low lines of credit, other potential creditors tend to lend to you within the limits of your established credit lines.

If you do not "need" credit or are not making any major credit dependent purchases in the next year or 2, I would suppose that CL would not matter. If timed carefully, one could simply ask for increases periodically, before a yr before the major purchases.

"Fico" seems to favor ppl who have high cl's but do not use them (which is where the above example comes in).

My understanding of the scoring may be faulty as I am new, but what I wrote above is my current understanding of how to achieve a high score.

Edit: Just learned that the actual credit limit does not hurt your FICO score, but does hurt your VantageScore (EX,TU), as cl accounts for 7% of score.

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