NinjaPigeon - My Flight to Financial Independence

Monday, July 03, 2006

Credit Limit Meme

Tired but happy has started a credit card limits meme that I thought was a cool idea. So here are mine:


CC1:   14300.00
CC2:    3750.00
CC3:   20300.00
CC4:    8000.00
CC5:    5800.00
CC6:     100.00
CC7:     600.00

Total: 52850.00

My limits are that high because I actively try to get them higher. Now, some people might freak out and think that's a bad thing. And in some cases, it surely is. But if you understand that part of what determines your credit score is utilization, you'll understand why having a higher total credit limit is not necessarily a bad thing.

Now, don't go run off and open another $20k in credit to do this! You take a hit whenever you get a hard pull on your credit from applying for a new line. The trick is to space these out and only have a pull every 6 months or a year. So obviously if you are about to apply for a new car loan or a house loan, you don't want to be doing this.

Also, if you don't have the discipline to have large lines without tapping them, then this strategy isn't for you. You'll just dig a deeper hole to climb out of.

Anyway, since I started working on my credit I've raised it over 100 points. I'm in the 780-790 range right now. So it appears to be working out well.


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