Simple Credit Question
 

Does requesting a CC company to lower your limit adversly affect your credit score?

Re: Simple Credit Question
 

Possibly. For example, if you have a card with a $10k limit but carry a balance of $5k, your limit-to-balance ratio is 50%. If you have them drop your limit to $5k (with the same balance) then your ratio rises to 100% usage & affects your score. That's a pretty elementary example but you get the point.

Re: Simple Credit Question
 

A related question: If you pay off your bill in full every month, do you always have a 0% utilization?

Re: Simple Credit Question
 

I had someone tell me about 2 weeks ago that by paying off your CC in full each month, it can actually hurt you.

I told him he was an idiot.

Thoughts?

Re: Simple Credit Question
 

[ QUOTE ]
A related question: If you pay off your bill in full every month, do you always have a 0% utilization?

[/ QUOTE ]

You will if the credit report is pulled during the time between payoff & new charges being billed to the account. It's basically a snapshot.

Re: Simple Credit Question
 

[ QUOTE ]
I had someone tell me about 2 weeks ago that by paying off your CC in full each month, it can actually hurt you.

I told him he was an idiot.

Thoughts?

[/ QUOTE ]

You are correct...at least by US standards. [img]/images/graemlins/wink.gif[/img]

Re: Simple Credit Question
 

[ QUOTE ]
Possibly. For example, if you have a card with a $10k limit but carry a balance of $5k, your limit-to-balance ratio is 50%. If you have them drop your limit to $5k (with the same balance) then your ratio rises to 100% usage & affects your score. That's a pretty elementary example but you get the point.

[/ QUOTE ]

But if you are one who carries zero balance and just believe they have over extended credit to you there would be no harm in having them drop the limit?

Re: Simple Credit Question
 

Nah, probably not.

Re: Simple Credit Question
 

[ QUOTE ]
I had someone tell me about 2 weeks ago that by paying off your CC in full each month, it can actually hurt you.

I told him he was an idiot.

Thoughts?

[/ QUOTE ]

he's an idiot