Tracy J asked:
Currently I have a store credit card that I have had open for 17 years with $5 k credit available to me. I am thinking that perhaps so much available credit ( I also have a Visa with $1k of credit as well) that it perhaps does not look good when going to purchases a car etc etc. Currently between both cards I owe $1.2k Does/will this effect my credit score?
NICK
Comments
the ratio of debt to credit available is part of the equation so it’s good to have a lot of credit available. Also having a long history is good.
So I think you should keep the store credit card and the visa.
I think that equifax gives you access to a credit score calculator when you get a credit report from them. It allows you to change things and recalculate the fico score. Maybe you should try it.
yes it does affect your credit score, but in a good way. you need to keep old accounts open, the credit bureaus look at length of time account have been open. let say you have tow credit cards one is 5 years old and one is a year old. if you were to close the one that’s 5 years old your score would go down. so keep old accounts open and keep you balances below 30%. that will help your score.
Not sure read some credit tips on this site
If you have no revolving balances, then you are fine to lower your credit limit. However, doing so while carrying a balance will reduce your score.
Credit utilization is the percentage of your credit limits that you are currently using. If you are using $1,200 on $5,000 total open credit, then your utilization rate is 24%. As long as your credit utilization rate is below 30%, then it is unlikely to affect your credit score in a negative manner.
However, reducing that one credit limit to $1,000 would give you $1,200 balance on $2,000 total credit limits. This is a credit utilization rate of 60%, which would reduce your credit score. It especially will drop your score as you approach the credit limit on any individual card.
I would recommend keeping the limits as they currently are until you pay off your balances. Once you have done so, then reducing the limit could be good if it gives you peace of mind and better control.
Lowing your credit limit will raise your debt to income ratio which is one of the major criteria lenders base thier decisions on when looking at your credit report
no, your credit card limit doe’s not affect your credit score only your spending habit in the past and prediction in the future.
you look OK to me, because if you keep your credit cards balances below 40% you really good to go. you need little more credit lines- optimal is 5 accounts with different kind of credit, so car loan if you can afford and want to buy will be beneficial for your credit ratings
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