I just found out that keeping my credit debt percentage at 25% of my credit limit helps my credit score. I have a $500 credit limit and would like to spend up to $250, so I'd like to upgrade my credit limit to $2000 to keep my credit debt below 25%. Is this a good idea?
2007-10-09 06:29:09 · 5 answers · asked by Malaia 2 in Business & Finance ➔ Credit
Keeping your balances below 30% helps your score. Paying in full every month is even better -- you save on the interest and stay out of debt. Plus, paying in full every month, the credit card company will automaticall increase your limit every 6 months to a year.
You can ask or an increase but I doubt they will jump you from $500 to $2000.
2007-10-09 06:47:19 · answer #1 · answered by bdancer222 7 · 0⤊ 0⤋
If you feel confident and responsible within those means, by all means, it's a good idea.
Utilization, or the % of credit card used, factors heavily into your credit score.
If you wish to initiate a credit line increase, make sure you have good payment history and simply call and request. Some companies are more lenient than others. You may have to settle for a $200 or $300 CLI and then try again in 6 months.
2007-10-09 06:32:42 · answer #2 · answered by nkozyra 2 · 0⤊ 0⤋
For your personal financial stability, it isn't wise to keep any debt on your credit card. However, for your credit limit, it is better to make steady payments than it is to pay it in one lump sum. Creditors want to make sure you have the discipline to make payments. Although, some companies will give you a higher limit, because they want you to spend so that you'll continue to pay interest for a longer period of time.
My advice is this: apply for a new credit card with a bank/company that has 0% interest and $0.00 transaction fee. You can then transfer your remaining balance to the new card and make steady payments for 12 months without incurring any interest. (this doesn't hurt your credit). Just make sure you watch, cause they'll probably not tell you when your 12 months is up.
2007-10-09 06:44:29 · answer #3 · answered by paafishe 1 · 0⤊ 0⤋
I dont know if this works for all but credit limit increase is based on an annual basis, credit limits are normally increased every year provided that your credit status is good, best way is to ask your credit card company...
2007-10-09 06:34:35 · answer #4 · answered by gnostic_legend 2 · 0⤊ 0⤋
New credit is 10% of your score. New debt is 30% of your score. It's a bad idea.
2007-10-09 06:56:02 · answer #5 · answered by JB 6 · 0⤊ 0⤋