Anonymous
Anonymous asked in Business & FinanceCredit · 1 decade ago

will having a high credit limit on my card increase my score?

i have a card with a limit of 2,000 and one with 500 pounds, im only 18. i really want to build a really good credit score for buying a house in a many years time. will asking my card issuers every 6 months for an increase help my score or will asking actually worsen it. thank?

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  • Jen M
    Lv 6
    1 decade ago
    Favorite Answer

    Well, (at least in the US) I understand that to figure your credit score, they look at how much debt you have to credit available. It is called a Debt to Credit Ratio. If your debt is low and your credit is high...then this generally is looked upon as positive because it shows a tendency to pay your credit off. I would not ask for an increase, this will happen naturally as you use your card and then pay it off. What will worsen it is not paying your bills on time and (again in the US) even paying your utility bill or cell phone bill late can adversley impact your credit. Mainly because credit card companies use late payments on ANYTHING as a cause to raise your intrest rates. What will help you build good credit the most is not using the cards overly but, PAYING THEM OFF. I usually will put no more than 500 dollars on my cards at any one time and then I pay them off before I put more on them.

    Also keep your oldest cards around because they will have your most complete information. And don't request too many cards because, again this can be looked upon as a bad thing.

  • 1 decade ago

    Basically you have to play the game. As long as you make the payments and don't pay it off too quickly then that will show that you are good at making payments consistently. Also, if you completely pay it off after some time then that will help too. The more you have (that you can take care of) the more your credit will go up. However, if you miss a payment or something then your score obviously will go down. Also, be careful not to have too much debt because even if you make payments consistently and make enough to take care of your expenses, it will still lower your score. Example, I did a refinance loan for a guy with about 1.5 million still owed on his home and his score was lower because of his debt. He made payments just fine but his debt was too great. Now if he pays off some of that then he will be back into the high 700's.

    Realistically you can get a loan with a 600 credit score, but your rates and fees will be high. If you can get your score close to 680 or above then you will get a decent loan with decent rates and fees. Into the 700's and you can pretty much get what you want depending on your income.

    It's good to see someone concerned with this at a younger age. Most people don't start thinking about this until their 20's or are out of college. Good luck to you!

    Source(s): 6 years in the business
  • 1 decade ago

    My understanding is that to be 'good' for credit you should have a credit history (ie have borrowed in the past) and ALWAYS met the minimum payments on time. It also helps to be on the electoral register (ie they can verify that you live where you say you do).

    The amount of available credit does not affect the score as such. But, if you have too much available credit it could adversely affect you ability to obtain further credit. You may only have £500 debt but if you have available £10K & only earn say £15K pa the lender may think OK not in trouble now but has the potential to get in trouble, so we had better not lend too much!

    It is recommended that if you have accounts that you clear the balance that the account is actually closed, so the credit is not available. So on the whole, make sure you always meet the minimum payments & keep the available balance as low as you need.

  • Anonymous
    1 decade ago

    Paying a credit card regular and ontime helps your credit score. Having a large outstanding balance will have the opposite effect. It is better to owe about 100 pounds and build a pattern of regular payments. If a lender decides you can have 4 times your income, they then take the outstanding balances off what they will lend you - therefore they will lend you less as you already owe another bank/credit card company a high amount.

    I hope that makes sense.

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  • 1 decade ago

    While having higher credit limits on credit cards and low or zero balances indicates to lenders that not only are you capable of managing credit but that other lenders also find you trustworthy. However, having too much available credit would also indicate that one day, if you were in trouble, that you could take on that much more additional debt. Most credit card companies review your record at least once a year. And if they feel as though you have managed your credit wisely, automatically increase your limit. Unless you credit card company fails to review your file and issue you an increase, I would just focus on maintaining low or no balances and using your available credit wisely.

  • 1 decade ago

    In the long run it may hurt. When they pull your credit (for a home or whatever) they will look at available credit and consider that at any point you could go out and max your cards out instantly, therefore they adjust a bit, obviously depending on income. I would keep it at 2,000 and pay your balance each month to establish credit.

    If you have available credit of $50,000 and meet with me today to get approved for a loan. Potentially you could go out tonight and buy a car and put it on your card which would in turn my likelihood to loan the money to you.

  • Anonymous
    1 decade ago

    worsen it! credit scores actually go down if you have too high a limit, because you have the "potential" to go into that much debt. my best advice: keep your credit limits low, try not to have more than 25% of the credit used up, and pay everything ON TIME, even if its just the minimum payment

    Source(s): me =o)
  • Anonymous
    1 decade ago

    There is a blanance you need to find. Having tons of credit is bad, having too little is bad. The best thing for you to do at your age it to pay off your card religiously. It is good you are concerned. So long as you are responsible your credit score will be ok.

  • 1 decade ago

    High credit does not in itself does not produce a good credit score.You could try using the card(s) - running up balances and then paying them off whilst keeping within your credit ceiling.This will demonstrate you are an active but reliable card user.

  • 1 decade ago

    they look at your debt ratio and if you pay your bills in a timely manner...your better of owing nothing with 2000 limit, than owing 5000 on 10000 limit

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