Ok - increasing your credit limit does help increase your FICO score, but not a whole lot.
When you ask your credit card company to increase your credit limit, they pull your credit (which is a little ding on your credit), and if they raise it, your FICO score goes up a tad.
I don't think it is worth it to try every couple of months.
Some credit card companies will increase your limit w/out checking credit - request an increase w/ out a credit pull.
Actually, most credit card companies will increase the credit limit based on your history with them alone and not pull your credit. Discover and citibank just did it for me about a month ago. Just tell them you want to increase your credit limit, but don't want them to pull your credit. They all say, no problem! Discover said if I wanted a lower interest rate considered, I'd have to my credit pulled though.
An increase in credit limit could affect you negatively as it shows the credit bureau that were you to go crazy you have access to more. I don't think this is always the case. You also want to keep your credit debt per card below 50% of the card's limit
I agree with ray_higdon. Increasing your credit limit may increase your FICO score, not sure how or why. But higher limits means higher risk to new potential lenders. A zero balance on 25K credit limit means you're free to have a spending spree on that card the day after you sign a mortgage and would therefore be less likely to pay your overall debt. So unless you're planning on using your credit cards to fund projects in the future I would suggest increasing your score another way. Have a few more low limit revolving credit accounts and one or two fixed loans and keeping those on track. I think showing a mixed bag of good credit is better than having one or two large credit limits on credit cards. Your FICO Score is an estimate of how likely you're able to repay a loan. What better way than to show that you can keep 5 or 6 accounts up to date without the risk that you could one day max out your limit unexpectedly. I'm not an expert - but always call my credit card companies to lower my limit, and I believe my rating is better for it.
The FICO score is a mathematical equation of the credit bureaus that lenders use to categorize you. The intent of increasing your credit limits is to make it easier to keep your balances below 50% of the limit. I always pay off my credit cards when I get the bill, but I put everything on my credit card for the cash back benefits...so if a lender pulls my credit and it shows I'm above 50%, the automatic assumption by the FICO rating algorithum is that I'm over extended and my FICO scores go down...
Massage your cards while at the lower limits. Keep say five in play but the balances never over 40% and of course reduce to zero every three months or so.
Never never ask for an increase as they will do a credit report and at this stage of your career you do not want it. You can always play the bank game. You borrow on a 90 day basis and pay it back. I used to do that for funds to attend a foreclosure sale. As time went on I did not have to do that I just had max CD's and I would go in the day before a foreclosure sale and pick up my Cashier Checks for the next days sale. My bank did this as an accomodation and never charged me. They wanted the CD's to stay in their branch. I also turned over collection of some Trust Deeds to their collection department. Of course I always took them back if they went sour and then substituted in as Trustee and ran the sale myself. To avoid a Mell of title I usualy held title in a Trust and I had an inhouse entity to play Trustee for the foreclosure activities.
My Bank in those days believe it or not was Bank of America. I used the Textile Branch and made the bank manager Mr. Green into a winner until he retired.
ummm....no....they don't HAVE to pull your credit. You are ABSOLUTELY WRONG. You can have your credit limit increased without making a new inquiry on your credit report.
I think that whenever you request a credit limit increase, they pull a credit report on you, which will definitely lower your FICO score.
MyFootSmells?!? Nice name!
Ok - increasing your credit limit does help increase your FICO score, but not a whole lot.
When you ask your credit card company to increase your credit limit, they pull your credit (which is a little ding on your credit), and if they raise it, your FICO score goes up a tad.
I don't think it is worth it to try every couple of months.
Some credit card companies will increase your limit w/out checking credit - request an increase w/ out a credit pull.
Good Luck!
[addsig]
Thanks! Yes I'm a newbie here trying to get into real estate investments.
myfootsmells
Actually, most credit card companies will increase the credit limit based on your history with them alone and not pull your credit. Discover and citibank just did it for me about a month ago. Just tell them you want to increase your credit limit, but don't want them to pull your credit. They all say, no problem! Discover said if I wanted a lower interest rate considered, I'd have to my credit pulled though.
An increase in credit limit could affect you negatively as it shows the credit bureau that were you to go crazy you have access to more. I don't think this is always the case. You also want to keep your credit debt per card below 50% of the card's limit
I agree with ray_higdon. Increasing your credit limit may increase your FICO score, not sure how or why. But higher limits means higher risk to new potential lenders. A zero balance on 25K credit limit means you're free to have a spending spree on that card the day after you sign a mortgage and would therefore be less likely to pay your overall debt. So unless you're planning on using your credit cards to fund projects in the future I would suggest increasing your score another way. Have a few more low limit revolving credit accounts and one or two fixed loans and keeping those on track. I think showing a mixed bag of good credit is better than having one or two large credit limits on credit cards. Your FICO Score is an estimate of how likely you're able to repay a loan. What better way than to show that you can keep 5 or 6 accounts up to date without the risk that you could one day max out your limit unexpectedly. I'm not an expert - but always call my credit card companies to lower my limit, and I believe my rating is better for it.
The FICO score is a mathematical equation of the credit bureaus that lenders use to categorize you. The intent of increasing your credit limits is to make it easier to keep your balances below 50% of the limit. I always pay off my credit cards when I get the bill, but I put everything on my credit card for the cash back benefits...so if a lender pulls my credit and it shows I'm above 50%, the automatic assumption by the FICO rating algorithum is that I'm over extended and my FICO scores go down...
Massage your cards while at the lower limits. Keep say five in play but the balances never over 40% and of course reduce to zero every three months or so.
Never never ask for an increase as they will do a credit report and at this stage of your career you do not want it. You can always play the bank game. You borrow on a 90 day basis and pay it back. I used to do that for funds to attend a foreclosure sale. As time went on I did not have to do that I just had max CD's and I would go in the day before a foreclosure sale and pick up my Cashier Checks for the next days sale. My bank did this as an accomodation and never charged me. They wanted the CD's to stay in their branch. I also turned over collection of some Trust Deeds to their collection department. Of course I always took them back if they went sour and then substituted in as Trustee and ran the sale myself. To avoid a Mell of title I usualy held title in a Trust and I had an inhouse entity to play Trustee for the foreclosure activities.
My Bank in those days believe it or not was Bank of America. I used the Textile Branch and made the bank manager Mr. Green into a winner until he retired.
Cheers Lucius
ummm....no....they don't HAVE to pull your credit. You are ABSOLUTELY WRONG. You can have your credit limit increased without making a new inquiry on your credit report.