Is there an obsession with CLI?

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GoCreditGo!
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Is there an obsession with CLI?

Postby GoCreditGo! » Fri Nov 08, 2013 8:19 pm

N00b question: CLI = credit limit increase, right?

I see many posts about getting CLIs. Why are so many people seeking (maybe obsessing) over CLIs?


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otter
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Postby otter » Fri Nov 08, 2013 8:42 pm

GoCreditGo! wrote:N00b question: CLI = credit limit increase, right?

I see many posts about getting CLIs. Why are so many people seeking (maybe obsessing) over CLIs?


For many of us, it's not the credit line increases themselves, but what it does for utilization. I'll use myself as an example... my total available credit just jumped from around $10,000 to $20,000 (from a new card, not from a CLI, but the principle is the same). On average, my reported balance is around $1000 every month(it varies, but it's anywhere from $500 to $1500- I always pay in full, though). So before my utilization was around 10%, but with the new available credit, it will now be 5%. That's important because utilization is around 30% of your credit score. I could probably get the utilization lower(by paying before the statements hit on my cards) even at $10000, but it's easier to do when you have higher available credit. So it's not that I'm going to go out and buy a bunch of crap, it's that I don't have to obsess about paying before the statements hit on my cards, etc.

Of course, it would be better to get a CLI than to apply for another card(as I did) since it's often a soft pull whereas new cards are a hard pull.

There's also the fact that higher credit limits beget more higher limits. Often it takes one creditor to raise your limit and it has a cascading effect and then a bunch of creditors follow shortly thereafter.
In my Wallet:
  • Amex PRG NPSL[3-14, bd 91]
  • Sallie Mae MC $8000[1-14]
  • Chase Freedom $4700[1-14]
  • Discover It $2750[8-13]
  • BoA UCF Alumni Cash Rewards $5000 [3-15]
Sometimes in my Wallet:
  • GM BuyPower WEMC $5000[9-14]
  • Wells Fargo Propel 365 Amex $7000[4-14]
  • Barclaycard Arrival WEMC $7000[3-14]
  • BoA Better Balance $3000[2-15]
In my sockdrawer: Amex BCE $1000[10-13, bd 91], OCCU Duck $10000 [11-13], The Sportsman's Guide Visa $8000[8-14], Chase Slate $4000 [9-14]Delta Gold Amex $2000 [2-15 bd 91], Diners Club MC $20000 [10-14] Commerce Bank Visa $2000 [3-15] Citi Double Cash $1000 [3-15]
Total CL: $90450

GoCreditGo!
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Postby GoCreditGo! » Fri Nov 08, 2013 8:51 pm

Oh wow! I had no idea that something like that would affect your credit score. What I do is:

1. Charge lunch to card $80
2. While sitting at table go online to pay $80

I utilize a credit/debit system to how I pay for bills, so it is pretty easy to spot if I have not paid anything. My monthly balance statements are always $0. Is this why my credit score is so low (not having a bill with a proper amount owed)?

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otter
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Postby otter » Fri Nov 08, 2013 9:01 pm

With FICO scoring, 1% is better than 0%. It's okay to have a few cards with zero balances, but if ALL your cards always show zero come statement time, FICO and other scoring models assume you must not use the cards at all. It's best to show 1-5% utilization because that shows that you use your credit, but have self-control.
In my Wallet:
  • Amex PRG NPSL[3-14, bd 91]
  • Sallie Mae MC $8000[1-14]
  • Chase Freedom $4700[1-14]
  • Discover It $2750[8-13]
  • BoA UCF Alumni Cash Rewards $5000 [3-15]
Sometimes in my Wallet:
  • GM BuyPower WEMC $5000[9-14]
  • Wells Fargo Propel 365 Amex $7000[4-14]
  • Barclaycard Arrival WEMC $7000[3-14]
  • BoA Better Balance $3000[2-15]
In my sockdrawer: Amex BCE $1000[10-13, bd 91], OCCU Duck $10000 [11-13], The Sportsman's Guide Visa $8000[8-14], Chase Slate $4000 [9-14]Delta Gold Amex $2000 [2-15 bd 91], Diners Club MC $20000 [10-14] Commerce Bank Visa $2000 [3-15] Citi Double Cash $1000 [3-15]
Total CL: $90450

GoCreditGo!
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Posts: 230
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Location: Seattle WA

Postby GoCreditGo! » Fri Nov 08, 2013 10:24 pm

I will have to ensure that I leave a little balance on there. What should I do on my gold charge card? What do I want it to show?

otter wrote:With FICO scoring, 1% is better than 0%. It's okay to have a few cards with zero balances, but if ALL your cards always show zero come statement time, FICO and other scoring models assume you must not use the cards at all. It's best to show 1-5% utilization because that shows that you use your credit, but have self-control.

MemberSince99
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Postby MemberSince99 » Sat Nov 09, 2013 7:51 am

Dead seriously - unless you are applying for some kind of credit, it really doesn't matter. The few extra points aren't worth staying up nights worrying over, or putting hours of thought and consideration into.

Use your card pay it off end of story UNLESS you are going for a mortgage and need every single point then pay everything but 1-5% as mentioned BEFORE your due date (so one extra payment). Allow a day for it to post.

There is no need to get all complicated and worried about this otherwise.

GoCreditGo!
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Postby GoCreditGo! » Sat Nov 09, 2013 9:14 am

Won't I have to pay interest on the entire balance, just to get the extra points for the 1-5% balance. Hrmmmm... Smart way to hold me hostage for getting better mortgage rates!

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Z06Biker
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Postby Z06Biker » Sat Nov 09, 2013 7:04 pm

The utilization reports when your monthly statement closes. As long as you pay off your entire statement balance within the ensuing 30 days you're given, then no -- you won't get hit with interest.
AMEX: PRG Gold, Business Simply Cash, Business Costco, BCE.
Chase: United MileagePlus Club, Sapphire Preferred, Amazon Rewards
Barclaycard Arrival World Mastercard
HSBC Cash or Fly World Mastercard
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GoCreditGo!
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Postby GoCreditGo! » Sun Nov 10, 2013 12:09 am

Oh gotcha. Okay thanks! I'm a n00b with this. I'm trying to get my credit score up after returning to the US. It does not pay to play expat for a few years.

Z06Biker wrote:The utilization reports when your monthly statement closes. As long as you pay off your entire statement balance within the ensuing 30 days you're given, then no -- you won't get hit with interest.

MemberSince99
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Postby MemberSince99 » Sun Nov 10, 2013 3:53 pm

It doesn't? Boy I'm in trouble then - that's how I intend to survive if I manage to make it working until retirement age. If I have to live in a third world totalitarian police state country, it might as well be a cheap place to live and closer to the equator than the North Pole.

That assumes I manage to hang on and keep working until then and with the big 50 approaching in a few years age discrimination should start kicking in so fingers crossed.



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