Building up credit history

[tom&tata 2]

Does anyone how to convince a credit card company to increase your credit limit threefold?

I spend about $5,000 per month (and pay off my balance in full each month), yet the best

I could get from Chase was a credit card with a low limit of $10,000.

My outstanding balance is always way too close to the limit (especially near the due date),

which negatively affects my credit score.

Ideally, I'd like to keep my debt/limit ratio under 25%, which means I need a credit line of

at least $30k.

When I asked Chase to increase it to $30k, they ran a credit check and denied my request.

I have other credit cards (including one "secured card" with a $15k limit that I used to

jump-start my credit), but I don't really want to use them anymore.

Any ideas?

If you close out the card you no longer want to use, that should boost your credit score, which will also increase the likihood of a higher limit with Chase. They take into consideration your debt-to-income ratio, and if you have lots of available debt (like that unused card) it negatively impacts your ability to get more credit.

Debt does not equal credit limit. You should have high credit limit but low debt, which leads to low debt to income ratio and low utilization. High credit limit is only bad when you use it all.

If you have high usage, why don't try to pay twice within a month instead of once only after the statement cuts. That way it would not show your utilization as high.

[mawilson 2,133]

If you close out the card you no longer want to use, that should boost your credit score, which will also increase the likihood of a higher limit with Chase. They take into consideration your debt-to-income ratio, and if you have lots of available debt (like that unused card) it negatively impacts your ability to get more credit.

Really? I always thought that closing accounts negatively impacts your credit score.

The "secured" account is also the oldest account on my credit report, so I'd like to

keep it open.

What's strange though is that my credit score is low only because of the high

debt-to-credit ratio on just one card. Overall, my debt-to-available-credit ratio

is not bad.

[mawilson 2,133]

If you have high usage, why don't try to pay twice within a month instead of once only after the statement cuts. That way it would not show your utilization as high.

Sounds like a great idea! In fact, I had to do it a couple of times already to make room for big purchases.

[*julez* 124]

If you close out the card you no longer want to use, that should boost your credit score, which will also increase the likihood of a higher limit with Chase. They take into consideration your debt-to-income ratio, and if you have lots of available debt (like that unused card) it negatively impacts your ability to get more credit.

Really? I always thought that closing accounts negatively impacts your credit score.

The "secured" account is also the oldest account on my credit report, so I'd like to

keep it open.

What's strange though is that my credit score is low only because of the high

debt-to-credit ratio on just one card. Overall, my debt-to-available-credit ratio

is not bad.

Well, having a $15K credit line, even if none in use, indicates you have the ability to get into pretty serious debt, so if you don't want to close it, maybe lower the limit? It seems kind of odd that your score is still kind of low based on the details provided.

Or, if its that one card that is the major problem, don't max it out each month.

[tom&tata 2]

If you close out the card you no longer want to use, that should boost your credit score, which will also increase the likihood of a higher limit with Chase. They take into consideration your debt-to-income ratio, and if you have lots of available debt (like that unused card) it negatively impacts your ability to get more credit.

Really? I always thought that closing accounts negatively impacts your credit score.

The "secured" account is also the oldest account on my credit report, so I'd like to

keep it open.

What's strange though is that my credit score is low only because of the high

debt-to-credit ratio on just one card. Overall, my debt-to-available-credit ratio

is not bad.

Well, having a $15K credit line, even if none in use, indicates you have the ability to get into pretty serious debt, so if you don't want to close it, maybe lower the limit? It seems kind of odd that your score is still kind of low based on the details provided.

Or, if its that one card that is the major problem, don't max it out each month.

Try paying multipe times (if twice is not suffice) so the balance reported (usually at statement cut off) is not as high - max 30% to 35% in that one card. I read in my FICO that they also do not like that I have more than 1 card that shows balance at statement.

I guess the learning is to get high credit score you need to have the high limit but act as if you do not need it (show low usage)

[mawilson 2,133]

Well, having a $15K credit line, even if none in use, indicates you have the ability to get into pretty serious debt, so if you don't want to close it, maybe lower the limit?

Do you think it would help?

How do they decide what your credit limit should be? Debt is serious only relative to your income.

I guess the learning is to get high credit score you need to have the high limit but act as if you do not need it (show low usage)

Well that's the thing, I don't really need it - I just want the cashback points

[mawilson 2,133]

I read in my FICO that they also do not like that I have more than 1 card that shows balance at statement.

I've never heard that one before.

In fact, I keep my other credit cards alive by using them once a month for small purchases

(magazine subscriptions and such.)

[tom&tata 2]

I read in my FICO that they also do not like that I have more than 1 card that shows balance at statement.

I've never heard that one before.

In fact, I keep my other credit cards alive by using them once a month for small purchases

(magazine subscriptions and such.)

That's what we do. We only use 2 credit cards mostly (1 for groceries, gas, eat-out, 1 for online bill & online purchases). The non rewards/non cashback will sit in the drawer & will be used once every 2 or 3 months.

I read it in my FICO the above reasoning but I don't think it matters. What matters mostly are utilization & age.

[mawilson 2,133]

The only thing I don't like about paying multiple times to keep the balance low is

having to add them all up at the end of each month to keep track of our expenses.

My wife is an authorized user on my account and we both use the same credit

card for purchases. Chase has a text messaging service which we use to query

our outstanding balance, which makes it easy to keep track of how much money

we spent so far.

We try to keep it under $5k otherwise expenses can spiral out of control...it's NYC.

[*julez* 124]

I have a card with Washington Mutual and it provides me with my credit score each month. I notice that when I pay off accounts in full, the next month my score jumps considerably. Anyhow, I found this PDF file on FICO's website and its pretty informative, so it might help clarify what the issues are for you, mawilson. Here is the link:

http://www.myfico.com/Downloads/Files/myFI...YFS_Booklet.pdf

Hope it helps!

[mawilson 2,133]

Thanks Julez!