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  1. #1

    Too much total CC credit limit

    Ignoring "credit cards are teh eval!!", and assuming a very low utilization rate (around 1-2%), when does the ratio between total credit limit and family income (DW and I) become too much?

  2. #2
    I have no idea what the magic formula is, but it does exist. Our broker asked us to lower our credit limits when we refinanced several years ago because we had too much available credit. I don't know what the utilization rate was back then, but it is at 1% now and we really haven't changed spending habits. I'm guessing we would have been at around 70% credit limit to income back then.

    Do you have access to a credit monitor with your credit cards? It would probably tell you if your ratio was too high.

  3. #3
    Chase CreditJourney ("powered by TransUnion") says that utilization is currently 0%.

    But lenders can balk at new loans when you have too high of a limit, even with low utilization.

  4. #4
    I remember our mortgage broker said that a low utilization ratio is a warning sign that you have too much available credit. I know a high utilization ratio affects your score, too. Damned if you do, damned if you don't!

  5. #5
    I got a warning that my credit score was low because I used too much credit; I finally got myself debt-free (I have my one-year pin now and my FICo is now about 810 (may have gone up since I last looked - I think 820 is their highest rating).

 

 

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