Credit Limit Increase Question

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Nachos Libres
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Credit Limit Increase Question

Postby Nachos Libres » Tue Mar 25, 2014 11:39 am

I'm new to these forums so I should probably give some of my background. I'm in my early 30s, have decent credit (755 Fico from Barclaycard) and own my own business. I was never good at budgeting - even though I was always good at managing my credit - and in order to get to where I could pay cash for everything I bought I closed all my credit cards back in 2009 (one I had had since I was in college - so easily 10 years on it). I know this is bad for credit, but I didn't care and still think it was the right decision.

Fast forward to today - I've had the Barclaycard Arrival AF version since August of 2013. I got it once PerkStreet (the debit card that paid 1-2% back) went out of business because even though I swore off credit cards forever I didn't like the thought of not getting perks or rewards back - yet I still budget as if I can pay for the purchase immediately. I was initially approved for $5k limit which I immediately called them once I got the card and told them that wasn't enough so they bumped it to $15k. I put on average over $10k in purchases on the card a month and so after about 6 months I asked for a CLI of $10k and they approved me for $5k because they said my credit utilization was too high (so usually $10k+ out of the $15k available).

Since this is my only credit card - it was purely due to me waiting to pay the balance as soon as the statement became available. I've since started paying the card balance every time it hits $2k (so I'm making several payments a month) and making sure I pay any balance remaining in full before the statement date hits (which usually means my statement balance is around several hundred dollars). I think this should impact my credit score positively once the FICO score updates.

With all this said - would it be ok for in several months (say 5 or so) to ask for another CLI? I can still function with $20k as my limit but it would be nice to have a little more room so I'm not having to make so many payments every month. If so, what would be a good amount to ask for? Our current financial goals are to buy a house (I'm currently saving for a 20% downpayment) and I don't plan on getting any additional credit cards or financing any cars (we pay cash for those) so I want to make sure I don't negatively impact my credit when the time comes to apply for a house loan and I didn't know if asking for CLI's would negatively impact my score.

Thanks for any feedback you can give.


beachminter
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Postby beachminter » Tue Mar 25, 2014 1:05 pm

It should be okay. I set a reminder in my calendar for every 6 months to ask for a credit increase.

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nismoZtuner
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Postby nismoZtuner » Tue Mar 25, 2014 7:51 pm

beachminter wrote:It should be okay. I set a reminder in my calendar for every 6 months to ask for a credit increase.


how is that working?
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thom02099
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Postby thom02099 » Wed Mar 26, 2014 9:45 am

Nachos Libres wrote:
With all this said - would it be ok for in several months (say 5 or so) to ask for another CLI? [color="red"] I can still function with $20k as my limit but it would be nice to have a little more room so I'm not having to make so many payments every month. If so, what would be a good amount to ask for? [/color] Our current financial goals are to buy a house (I'm currently saving for a 20% downpayment) and [color="blue"]I don't plan on getting any additional credit cards or financing any cars (we pay cash for those) so I want to make sure I don't negatively impact my credit [/color]when the time comes to apply for a house loan and I didn't know if asking for CLI's would negatively impact my score.

Thanks for any feedback you can give.


Call them up and ask. Under the circumstances, you may be surprised. They may be willing to give you a CLI right now, given the amount of money you're pushing through the account.

Paying cash and not applying for additional credit cards COULD impact your credit...negatively. One of the things lenders look for is a good mix of credit -- revolving, car loans, unsecured personal loans, HELOCS, etc. Not having these could be inhibiting your scores. Yes, you have a 755 from what Barclay is reporting. It's also important to know what the other 2 scores are as well. They may or may not be within that range. You need to know. That's a great score and you'll get the best terms in that score area, but since you're considering a mortgage in the future, those other 2 scores become even more important, since most mortgage lenders take the median score to base underwriting on.
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takeshi
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Postby takeshi » Thu Mar 27, 2014 8:21 am

Nachos Libres wrote:With all this said - would it be ok for in several months (say 5 or so) to ask for another CLI?

It's always ok. Whether or not you'll get it is another matter entirely and we really can't guarantee anything one way or another. If you want it then request it.

thom02099 wrote:One of the things lenders look for is a good mix of credit -- revolving, car loans, unsecured personal loans, HELOCS, etc. Not having these could be inhibiting your scores. Yes, you have a 755 from what Barclay is reporting. It's also important to know what the other 2 scores are as well. They may or may not be within that range. You need to know.

+1. Also consider that generally for optimal scoring 2-3 cards is recommended in the mix of credit.

Nachos Libres wrote:Our current financial goals are to buy a house (I'm currently saving for a 20% downpayment) and I don't plan on getting any additional credit cards or financing any cars (we pay cash for those) so I want to make sure I don't negatively impact my credit when the time comes to apply for a house loan and I didn't know if asking for CLI's would negatively impact my score.

The 6 month rule of thumb applies for hard pulls for CLI's just as it does for new credit. What's your buying timeframe? You might also want to verify with whoever is handling your mortgage on what they're specifically looking for.

Nachos Libres
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Postby Nachos Libres » Thu Mar 27, 2014 7:50 pm

Thanks every one for the suggestions.

takeshi wrote:It's always ok. Whether or not you'll get it is another matter entirely and we really can't guarantee anything one way or another. If you want it then request it.


+1. Also consider that generally for optimal scoring 2-3 cards is recommended in the mix of credit.


The 6 month rule of thumb applies for hard pulls for CLI's just as it does for new credit. What's your buying timeframe? You might also want to verify with whoever is handling your mortgage on what they're specifically looking for.


It will probably be another 2 years before I have enough saved for a house. And while I know more cards may look better for me, I'm not really into having cards that I won't use. But, I would open to suggestions.



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