New Credit

[Debt]

What is the name of your state? Massachusetts


After months of disputing infomation that was listed on my credit report by one creditor, they have recently updated credit reports to acknowledge a year's worth of on-time payments.

I have been on the track of improving my credit and have paid off all debt except for the one I have mentioned above and a credit card I got from Capital One a couple of years ago that has been maintained perfectly. I was given a very small amount as a line of credit from Capital One and it has increased little by little over the last two years.

Capital One is now offering me the opportunity to increase my credit limit by an additional $1000. My question is:

Would it damage or help improve my credit even more if I accept their offer?

I've heard conflicting stories both ways and am not sure what to do. I believe the increase limit is being offered as a reward for my good payment history, yet I would not do ANYTHING that is going to take me a step back credit wise.

I'm planning to buy a house and was waiting for the previously mention creditor to update my reports so that I can go through the pre-approval process with accurate information on my report. I would like apply for a pre-approval in June.

Any advice or resources I can check about this?

[Ladynred]

Yes, head on over to [url]www.creditboards.com.[/url] Their main thing there is credit repair and the folks there could give you a better feel for how the increase in the card limit may or may not hurt you.

[bigun]

Cap1 doesn't report credit limits so it will be no issue unless, they pull a hard inquiry prior to granting the increase. That may lower your score a couple of points.

[JETX]

I disagree.

"Would it damage or help improve my credit even more if I accept their offer?"
*** Your credit score is increased or decreased by this 'credit usage' (ratio of limit vs. debt): It is best if you are not using any revolving accounts at more than 70% of their credit limit. This only includes your open accounts for which the credit limit/loan amount is available. High usage (balances above 50% of the credit line) are usually considered negative, because lenders worry that you may be using more credit than you can reasonably afford to repay. Being "maxed out" on a credit card (when your balance is close to or above the assigned limit) is especially negative. The more accounts in this situation, the more it impacts your score. Note that in some cases, such as very high credit scores, as little as 20% usage may have a negative impact, although minor. On the other hand, low usage is usually considered positive because it provides lenders with information on how you use credit, and because it shows that you do not need to use all of the credit available to you.