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A lowered credit line does not always mean a lowered FICO


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I was on the internet earlier and someone did not seem to understand this advice so I thought I'd post a brief explanation. Even if you receive a CLD, it will not affect your FICO score as long as you pay off the balance.

For example, let's say you have 3 credit cards with a CL of $10,000 on each one. Also, let us say that one of the cards is reduced to $1,000. As long as you can pay that card down to $500, your debt-to-credit ratio will be unaffected.

2 cards $10,000 with 2 balances x $5,000 = $10,000

1 card $1,000 with 1 balance x $500

debt-to-credit ratio = 10,500 : 21,000

originally it was 3 cards with $10,000 with 3 balances x $5,000

debt-to-credit ratio = 15,000 : 30,000

10,500/21,000 = 50%

15,000/30,000 = 50%

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