should i raise my credit limit?

Question

I currently have 3 credit cards (excluding cards from stores) with credit limit of $6,300, $4000, and $2000. The first card has a $2000 balance on it, and the other two cards have $0 balance. Since the first card and second card have 0%APR, i only paid $700-800 every months and put the rest of the money into saving.

My question is, if i raise my credit limit, will it help or hurt my credit score? (my current score is 740)

Thanks :-)

Thanks for the answer~
--it is true that bank will automatically raise my credit limit once awhile...but i also have the option to click on the "raise credit limit" button on my account page.
--hmmmmm, i guess i am kind of greedy...since my credit history is not long enough, so i was trying to find other ways to further improve my score.
--good point! I think i should just carry 1 card from now on. I actually love to pay all my expenses on my credit card (grocery and what not) I think as long as i dont have to pay interest fees, it is nice to earn some rewards and cash back too:-)

thanks EQ, i will check the website out~

Studly,
Nah, i dont want to get a new card. i closed my American Express Gold Card few weeks ago and got my new 4000 credit limit card with 0% apr for 1 year (dont want to pay american express annual fees any more)

Well, most of the 0% cards nowadays last for 1 year...my $2000 card still have 2 months to go. But i will pay it down to around $700 by end of this month. ( i paid $700 last night and i will pay some more next week) so i guess i can maintain a less than 25% debt

My question is, how much available credit is TOO MUCH to get creditors nervous?

Thanks

Answer 1

Just a couple questions:

On the cards with 0%APR, when does that deal expire? Most times they only run for a few months, rarely for a year. After that they will start interest, but it's usually pretty reasonable rates.

So far from you description, you are doing everything right. Increasing your credit limit will improve your score, if done CAREFULLY!. Keep the debt/credit ration at no more then 20%.

What that means is you currently have a total of $12,300 in credit, and are using $2000 of it. Your D/C ratio is now 16%. I would suggest you get another $5000 in credit, and try to keep your total balances to around $4500. That will keep your D/C ratio under 25% and give you some spending "breathing room".

The dangers: Watch for when your interest rate kicks in on those 0% cards. The sudden jump in payments may mess up your budget.

Also note that if you get too much available credit, it makes potential lenders nervous. They see that you have a lot of unused available credit, and are reluctant to give you a loan. For this reason, too much credit can harm your credit score. Credit Card companies love to give you tons of credit....don't get sucked in by their gimicks. They are not doing you any favors.

Answer 2

Increasing your credit score prohibit has not anything to do together with your credit score ranking. As a question of truth, bank card businesses could broaden your credit score prohibit whilst you just about succeed in your credit score prohibit, so long as you preserve your repayments on time. The simplest strategy to upgrade your credit score ranking is to make your repayments on time. Remember, the quality factor to do is repay your stability if you'll be able to. Do now not cost whatever that you simply can't come up with the money for to payoff whilst the invoice comes.

Answer 3

Increasing the limit will reduce your porportion of balance to credit limit, which is good.

It will increase your credit score.

Paying down your debt will also increase your score.

Want more expert advice:

http://www.expert-credit-advice.com/

Answer 4

Oddly, raising your credit limit can actually be good, assuming you don't run up the debt. They like to see a big gap between your actual debt and available credit.

It's not necessarily that simple, though. There is some more info available here http://articles.moneycentral.msn.com/Banking/YourCreditRating/7FastFixesForYourCreditScore.aspx for one source.

Answer 5

It should raise your score as long as your spending habits don't increase. You will be using a lower percentage of your available credit, which is a positive thing.

Answer 6

I purposely keep one card, the one I carry , with a low balance so if someone scams me the loss will be limited

Answer 7

Well then don't change it that's great for your score 2 be that high.Keep up the good work

Answer 8

It should raise it as long as you do not go over your % that they figure your able to repay