FICO Credit Question - Posted by Matt (FL)

Posted by gman on March 26, 2006 at 15:28:29:

Patrick gave a very good answer. Mortgages aren’t figured into “available credit”, neither is a car note.

FICO Credit Question - Posted by Matt (FL)

Posted by Matt (FL) on March 25, 2006 at 12:57:54:

Does anyone know if asking your credit card companies to increase your line of credit will in anyway adversely affect your credit score? I have 4 credit cards with a combined available credit of $30,000 of which I am only using about $3,000. However my ratios are getting up there on the mortgage loan side of the equation…my thinking was if I could get my credit limits increased it would buy me a little more room on my overall debt available to debt used ratio. I have great credit, and a long history with these credit card companies, I am thinking I could almost double my available credit with them just by asking, but I don’t want that to hurt my credit. Any ideas or experience with something like this?


Credit Increase Could Backfire… - Posted by Randy (SD)

Posted by Randy (SD) on March 26, 2006 at 09:02:33:

I’m surprised no one mentioned it but increasing your “available credit” could have a negative impact. There is such a thing as “too much credit”. Also if you were to increase all four accounts in a short time period it could be interpreted as a impending problem so if you choose to try this approach proceeded with caution.

Re: FICO Credit Question - Posted by Rich

Posted by Rich on March 25, 2006 at 17:58:15:

Your available balance is reported to credit agencies but not incorporated into your FICO score. The credit score is intended to help predict how well you service your debt. Lenders look at the rest to see how much debt you have unused to determine if they are at risk from behaviors that put them at risk - behaviors that won’t modify your FICO until you engage in them - such as spending your entire new credit limit.

Here’s a link I found that may help:

Re: FICO Credit Question - Posted by Jonathan-OH

Posted by Jonathan-OH on March 25, 2006 at 13:24:06:

From my experience, any time I asked for a credit increase I saw no change to my FICO score. In fact, there wasn’t even a credit inquiry on my credit report. I would ask your credit card companies to be certain, though.

Re: FICO Credit Question - Posted by Patrick S. Lawson

Posted by Patrick S. Lawson on March 25, 2006 at 14:19:51:

It should have no adverse effect on your credit, nor should it have any positive effect. Your Utilization on your credit cards is already low. Since the scorers compartmentalize different credit accounts (mortgage, installment, revolving, etc.) with an established, active and clean revolving credit history the “positive weight” given for those accounts is probably maxed. Keeping in mind that the exact scoring mechanism is a mystery (even to the pros) there may be some effect because of the (marginal) change to your overall credit profile.

Re: FICO Credit Question - Posted by Matt (FL)

Posted by Matt (FL) on March 25, 2006 at 15:00:47:

That’s interesting…basically my reason for doing this would be so my overall debt to available debt ratio would be lower,not to necessarily help my credit score. My thought is that on agregate my overall debt (including mortgage) would be less vs my available credit, possibly resulting in a loan approval that may have been marginal with less available debt. I guess I am looking at the total pie…for example if I have mortgage debt of $100,000 and credit available from other sources of $30,000 I would be using $100,000 of an available $130,000 (or 77% usage) where as if I were to double my credit available to $60,000 I would only be using 63%. I am to a point where additional financing is becoming difficult, even though my credit score is good. I know factors such as my Debt/Income play a role, but I thought by making my ratio on the usage side of things look beter I may make myself look beter in the eyes of the lender. Bottom line is I may be to a point where private funding, etc will be the route I need to go. I didn’t want to try anything though at the risk of my credit score since I have been able to get a couple of “exception” loans just on the strength of my score and credit history.

Re: FICO Credit Question - Posted by Patrick S. Lawson

Posted by Patrick S. Lawson on March 27, 2006 at 07:24:37:

Your Debt-Ratio is not calculated by your available credit vs. utilized credit. It is your total monthly obligations vs. gross monthly income.