Mom of 3 question?

Discussion in 'Credit Talk' started by sharon, Jan 10, 2001.

  1. sharon

    sharon Guest

    I was reading your response to the limit thing on CRA? Does the limit being reported increase or decrease your score? Sorry i'm new to all this, and you seem to have all the answers :)
  2. roni

    roni Well-Known Member

    May I answer?

    Not Momof3 but, higher credit limits have the potential for helping your scores. This is because it could help your credit utilization ratios. You do not want to utilize over 30% of credit limit. I try to stay about 15% as per fico website. But no one here seems to agree with me. But anyway, having a high credit limit can help your ratios cause it is harder to max out. They take your total balances/ total credit limits.

  3. Momof3

    Momof3 Well-Known Member

    Well Roni answered your question. yes limits do help your scores and when they only report your balances and use them in the debt ratios if your limits are not being included this can hurt your scores, because they are basically counting your balances against what limits are being reported and if some limits are not being reported with those balaces then those will hurt your overall scores.
  4. Sorin

    Sorin Well-Known Member

    It's a good thing to have your limits reported. About 30% of your FICO score is based on the balance/available credit ratio. That is, the sum of all your balances over the sum of all your credit limits. If some accounts do not report the limit, this will increase this ratio and decrease your general FICO score.
  5. Momof3

    Momof3 Well-Known Member

    Yes so true Example

    You have 3 cards
    5000 limit balance 2000
    4000 limit balance 1000
    3000 Limit balance 1000

    Debt ratio with all limits is reported at 33%

    Now take the top limit off but still count balances ratio is at 57 %, big difference

Share This Page