Everyone knows that your credit score is adversly affected by what you owe, what you own, tradelines, credit history and a million other variables. (Insert joke here....)
But this a simple, free way that you can get a few points that may be critical if you're buying a home.
First off, you have to know that the ideal balance for a credit card is between 20-30% of your limit per card. So if you're balance is $1000.00 ideally your debt on that card is between $200.00 and $300.00.
Well let's say that your balance is closer to $500.00, which is 50% - and you're bying a house soon and need a few points improvement but you don't have enough to pay it down.
Try this, tell the credit card company to raise your limit. Tell them it's for any reason, buying furniture, transferring a balance, new tires whatever they need to hear. Keep in mind you're talking to a person on the other end. A person that probably has credit cards too. They don't know you, don't know anything about you except what their computer screen tells them. So don't be afraid! They can't do anything more than say no, politely. :)
And if you insist eventually they will transfer you to their manager and you can tell them the same thing, 'Raise me or I'm leaving', whatever they need to here.
So, they raise you $500.00, which brings you to a $1500.00 limit, with a $500.00 balance.
Now you're down to 30%. And it only cost you a phone call. :)
(In the interest of full disclosure, this may not work for every credit score. It really depends on how the rest of your credit is weighted against this card. If you have 11 cards and you can only get one raised, the benefit will be minimal. If however, it does work for only one, transfer the balances of some of the other ones to lower their balance.)
Remember, it's your score and no one other than you can improve it.
Enjoy,
;)
;)
This is a very good idea but there are other things that you need to look at with this. 1. Not all credit companies report to all 3 credit bureaus. If credit card company "A" only reports to Experian and Equifax, and your middle score is with Trans Union..... this is a wasted phone call. It will do nothing for you, other than to put you into the second thing. 2. As a Senior Loan Officer, I see people all day long that have over extended their credit. People may have all the intentions in the world on making their payments on time. But I also hear from clients all over the U.S. that "something came up" and they needed to use some of their available credit. The problem is this.... the majority of people that are out there, do NOT pay more than their minimum payment. For the sake of conversation. Lets talk about 1 popular credit card company with an APR of 21.24%
It would be great if people would pay more than the minimum in order to pay off their credit cards in 12 months time, but unfortunately people DO NOT. And most people that are out there.... if they have more credit.... will use it. Now the numbers above would be valid if they only used their credit cards at the bal. amount and did not charge anything new in the months that they are paying on them.
Yes... if they had an increase in their limit, it could theoretically help them in their credit scores but also there is another variable. 3. What if their credit card company only reported quarterly? Your new increase in credit might not show up on the bureaus for up to 3 months.