How can I use my credit card account credit limit to raise my credit score?
Guest: Fess
Post subject: How can I use my credit card account credit limit to raise my credit score?
Posted: Thu Feb 03, 2005 11:50 am
Quote:
2) don't utilize more than 49% of your credit line on each card and don't utilize more than 49% of your total revolving credit limit.
I've purchased the book YOUR CREDIT SCORE by Liz Pulliam Weston.
Its an excellent read so far....
On P.42 it states:
Quote:
'Your balances (the amount your carry plus the amount your charge) shouldn't exceed 30% of your total credit limit at any given time. The higher your score, the lower the percentage of your credit limits you would need to use to improve your numbers'
is it 30% or 49% as fotomaniak suggested?
Thanks
Fess
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Guest: Polonius
SENIOR MEMBER (Member for 2 yrs.+)
Posted: Thu Feb 03, 2005 12:01 pm
It's both!
There are many scoring models and many different breakpoints. The models aren't sophisticated--they work in chunks and the breakpoints seem to be at the 30%/50%/70%/90% points. You'll get a pop in your credit scores in most models if you go from 51% to 49%; you'll get another pop if you go from 31% to 29%. The Credit PLUS score simulator at Experian figures 0%-29% as the same score, so you don't get any benefit if the number goes any lower than 30%. I don't know if that's true for other scoring models. (I'm pretty sure about the 30% and 50% breakpoints. Some models might be using 75% instead of 70%...)
By the way, the Experian Credit PLUS report says it does not consider cards which have no specific credit limit on file. Other models I think take the highest balance on file as the credit limit in the calculation.
_________________
Polonius
"Neither a borrower, nor a lender be; For loan oft loses both itself and friend"
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Guest: fotomaniak
Posted: Thu Feb 03, 2005 12:48 pm
Polonius wrote:
By the way, the Experian Credit PLUS report says it does not consider cards which have no specific credit limit on file. Other models I think take the highest balance on file as the credit limit in the calculation.
Equifax uses highest balance as a credit limit if they don't know the actual credit limit.
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Guest: Fess
Posted: Fri Feb 04, 2005 8:36 am
Quote:
There are many scoring models and many different breakpoints.
Yes, the book mentioned the numerous scoring models out there. Wasn't aware of the 'chunks'/breakpoints. I'll keep that in mind, thanks.
Quote:
Equifax uses highest balance as a credit limit if they don't know the actual credit limit.
Confusing. If they use your highest balance as credit limit, they would compare you overall balance to that highest balance?
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Post subject: How can I use my credit card account credit limit to raise my credit score?
Posted: Thu Feb 03, 2005 11:50 am
Quote:
2) don't utilize more than 49% of your credit line on each card and don't utilize more than 49% of your total revolving credit limit.
I've purchased the book YOUR CREDIT SCORE by Liz Pulliam Weston.
Its an excellent read so far....
On P.42 it states:
Quote:
'Your balances (the amount your carry plus the amount your charge) shouldn't exceed 30% of your total credit limit at any given time. The higher your score, the lower the percentage of your credit limits you would need to use to improve your numbers'
is it 30% or 49% as fotomaniak suggested?
Thanks
Fess
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Guest: Polonius
SENIOR MEMBER (Member for 2 yrs.+)
Posted: Thu Feb 03, 2005 12:01 pm
It's both!
There are many scoring models and many different breakpoints. The models aren't sophisticated--they work in chunks and the breakpoints seem to be at the 30%/50%/70%/90% points. You'll get a pop in your credit scores in most models if you go from 51% to 49%; you'll get another pop if you go from 31% to 29%. The Credit PLUS score simulator at Experian figures 0%-29% as the same score, so you don't get any benefit if the number goes any lower than 30%. I don't know if that's true for other scoring models. (I'm pretty sure about the 30% and 50% breakpoints. Some models might be using 75% instead of 70%...)
By the way, the Experian Credit PLUS report says it does not consider cards which have no specific credit limit on file. Other models I think take the highest balance on file as the credit limit in the calculation.
_________________
Polonius
"Neither a borrower, nor a lender be; For loan oft loses both itself and friend"
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Guest: fotomaniak
Posted: Thu Feb 03, 2005 12:48 pm
Polonius wrote:
By the way, the Experian Credit PLUS report says it does not consider cards which have no specific credit limit on file. Other models I think take the highest balance on file as the credit limit in the calculation.
Equifax uses highest balance as a credit limit if they don't know the actual credit limit.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Guest: Fess
Posted: Fri Feb 04, 2005 8:36 am
Quote:
There are many scoring models and many different breakpoints.
Yes, the book mentioned the numerous scoring models out there. Wasn't aware of the 'chunks'/breakpoints. I'll keep that in mind, thanks.
Quote:
Equifax uses highest balance as a credit limit if they don't know the actual credit limit.
Confusing. If they use your highest balance as credit limit, they would compare you overall balance to that highest balance?
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
posted by CardRatings.com at 12:05 PM
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