Posted by Joshua Lewis on February 20, 1998 at 18:18:39:
In Reply to: Does too much credit available hurt? posted by Tim Lewis on February 15, 1998 at 20:19:04:
Tim,
Your questions are some of the more frequently asked questions by savvy consumers. I hope these answers will provide the insight that you are looking for.
1)While available credit limits do affect FICO scores, in my experience it is not a major determinant of the credit score. It is of far less importance than such factors as payment history and account balances. While it is possible that the increase in credit limits lowered your credit score it is likely that any change would be minimal. Since your previous score was a 730 it should not affect your ability to get a loan. In fact, most loan programs that do give weight to high credit scores consider anything at 700 and above to be their top tier.
2)There really are no guidelines as to how much available credit one should have in relation to their income. In my experience the available credit you have would actually be quite low in relation to your income. Because any affect on your credit should be minimal and you do have an excellent score I would not recommend closing accounts that you are using.
3)The only way that income would affect your FICO score would be through the use of what Fair, Isaac calls an application model that is developed specifically for a lender. The income would be taken from your loan application and input by the lender and a score would then be generated. I do not know of any lenders doing this. Most will take the score generated by the credit bureaus.
I hope this answered your questions. Feel free to e-mail me a jlewis44@msn.com if you have any additional questions.