I know that having a higher % of card ballance, even paid in time can harm your credit. On the other hand, high credit limit itself can do the same. So, let's say you owe 6000$ and your credit limit is $10 000 (so you owe 60% of your credit limit), In this case what would be better, to INCREASE or to DECREASE your credit limit. (In the first option the % will obviously decrease)
2007-07-31 09:36:20 · 4 answers · asked by Dimiter T 1 in Business & Finance ➔ Credit
no real answer for you, and no one can give you one, not even the Credit Bureau's themselves.
Truth- Do not exceed 50% of your total available credit.
That does not nessisarily mean on one card. But if you have one card maxed out at 5k, then you should have 5k available on another.
Having to much, or to little available credit is bad, but no one can tell you how much that is. The CB's to a actual debt to income, and potential debt to income ratio. If you owe to much, it can hurt you. If you have to much available credit it can hurt you. And if you dont have enough available credit, it can hurt you. Open a couple card, with decent limits, dont exceed 50% of the limit, dont ever be late, and you should be ok. But again, TO MANY CREDIT CARDS hurts you!
2007-07-31 10:43:45 · answer #1 · answered by Anonymous · 1⤊ 0⤋
It would be best to pay off that debt and then pay the credit card balance in full every month.
A big part of your credit score is based on the ratio of debt to available credit. If you're over the 50% point, your score goes down. Increasing your credit limit would lower your debt percentage. Lowering the limit would make it worse.
However, credit card companies might not be willing to increase your limit. In fact, if they think you're having financial problems, they might just decrease your limits and raise your interest rate.
By the way, the fastest way to get an increased credit card limit, is to pay your card off every month. They'll keep raising and raising that limit, trying to entice you to charge that card up.
2007-07-31 09:48:22 · answer #2 · answered by bdancer222 7 · 0⤊ 0⤋
If you are concerned about your credit score at this moment- say you are looking to buy a house-mortgage, paying down the balance would be best. When you ask for increase in your limit it is like applying for a card because most likely this will trigger a credit check.
2007-07-31 09:45:51 · answer #3 · answered by I.C. 3 · 0⤊ 0⤋
Pay it down then lower the limit would be best for your credit, but if you are just looking at lowering or raising the limit I wouldn't do either just leave it as is for now and keep making payments. I wouldn't let them raise your limit either.
2007-07-31 09:56:27 · answer #4 · answered by vspin1 1 · 0⤊ 0⤋