Is too much credit bad?? - Credit Repair Forum from Creditnet
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  1. #1
    wing007 is offline Junior Member
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    Apr 2002
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    I see that a lot of folks in this forum are obsessed with increasing the credit limits on their cards.
    I remember having read somewhere that having too much of open, unutilized credit is bad for your credit history and will lower your score.
    Is there any truth to this, folks?

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  3. #2
    erik776 is offline Senior Member
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    Apr 2002
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    Re: Is too much credit bad??

    Q:
    "I see that a lot of folks in this forum are obsessed with increasing the credit limits on their cards. I remember having read somewhere that having too much of open, unutilized credit is bad for your credit history and will lower your score.
    Is there any truth to this, folks?"


    The answer is complex. The short answer is less than $8,000 total credit card line is probable bad and more than $25,000 won't help your credit score but if it is mostly unused, may scare a potential lender if you are looking for a mortgage.

    First there is more than one kind of credit scoring. The FICO score is the basic type of credit scoring used. If you want to see what goes into a FICO score check out http://www.usatoday.com/money/wealth/saving/msw149.htm

    Also, http://www.myfico.com/MyFICO/CreditC...ICOFactors.htm

    A FICO score is not negatively affected by having a lot of credit. One of the things a FICO score looks it is Revolving credit % balances available. This is the total amount of debt owed against your lines of revolving credit combined, divided by the total amount credit line you have on those credit cards. You want to keep this ratio under 10% to 15% to get the best FICO score.

    Now if you are going for a car loan or a mortgage, different score systems are used. They very but they consider additional information such as how long on job, cash on hand, total unused credit line, time at current address, debt ratios etc. If you have $80,000 in total credit line, $2,200 in debt on the credit cards, make $45,000 a year and want a $189,000 house and want to finance it 5% down, the total credit card line may make a potential mortgage lender nervous. The thing to do in a case like this is to either ask for a reduction in credit line with some of the credit card companies or close some of the cards. Never close your oldest revolving triad. A revolving triad is a Visa, MasterCard, Discover or Amex card that you don't pay off every month.
    Erik.

  4. #3
    tinaboo is offline Senior Member
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    Mar 2002
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    Re: Is too much credit bad??

    I closed my oldest LOC before I found this board. It was my Providian acct. The only reason why was they was increasing my APR to 29.9% as we all know. So I closed it with a APR of 16.99%. Was this a bad move?????

  5. #4
    erik776 is offline Senior Member
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    Re: Is too much credit bad??

    Probably. Never close you oldest revolving triad unless you have another one that is 5 years or older. A revolving triad is a Visa, MasterCard, Discover, or Amex that you don't have to pay off each month.
    Erik.

  6. #5
    wing007 is offline Junior Member
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    Re: Is too much credit bad??

    Erik,
    thanks for the informative post. Just one question about Revolving credit % balances. Is this the total amount added up across all the cards or this looked at for every individual card?

    thanks.

  7. #6
    erik776 is offline Senior Member
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    Re: Is too much credit bad??

    No one seems to know fore sure. But I would watch both. In other words if you had a credit card with a $2,000 line and a card with a $200 line and put $50 out on both, the small card will be at 50% utilization. This will hurt you score a bit. If you can pay your cards off every month, who cares. Before you need your score up you pay off all your cards and wait until they all show zero on you report. Now on the other hand, if you carry thousands in debt all the time you will get a better score if no card exceeds 15% utilization.
    Erik.

  8. #7
    creditwork is offline Senior Member
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    Mar 2000
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    1,396

    Re: Is too much credit bad??

    I agree, I am obsessed with higher limits and lower rates, I even started a business to help me and others achieve just that.

    CreditWorks, LLC.
    www.creditsense.com

    It works for me and everyone else that has used it.
    CreditWorks' has paid over 19% since '96. Trying to improve your credit to get lower rates and higher limits.

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