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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Elroy Jetson who wrote (69057)	8/30/2006 8:53:43 AM
From: Wyätt Gwyön	Read Replies (3) \| Respond to of 110194

he sensible idea that if you have a good income and sufficient assets, then you will also have a goodly amount of credit available to you...Who would you rather lend $5k to? A.) The person with $100k in available credit and only $2k actually used, or;B.) The person with $10k in available credit who has $8k used.C.) The person who has no available credit but claims they have a lot of money and a good job. the hole i see in this logic is first, why does somebody who only uses $2K of credit need to have 100K available? why not have just the amount available that you would actually use, or maybe twice that amount? i have 2 cards with 25K limits, so 50K total. i don't think i have ever put 20K total on in a month, normally 5-10K (usually on just one card, depending on which one needs the airline miles). since i pay this off every month, i have no practical motivation to ask the companies to raise these amounts. i guess i could ask the cos to raise the limits, or get more cards and spread the charges between them so that they are all less than 10% of the limit. based on what you've said, that sounds like the practical approach to raising one's credit score (though i still don't know if it matters for insurance). the notion that doing so would make me a better credit risk seems silly. especially since, having already a pretty good score, it would be easy to get more credit. so it does not prove anything. the CC cos should be able to tell if a person has acquired all the credit he can get, or if he could get more with a phone call. i have always paid off my CC balance in full every month, for many years. i imagine there must be a lot of people doing the same thing. i think the credit cos should use a different logic for people who pay off their cards each month than for revolving debt types. if you pay it all off, then it doesn't matter that your balance goes from 0% of limit to 50% of limit and then back to 0% every month. somebody who charges a certain amount each month, but pays it off, every month for years on end, shows he can handle that payment. somebody who charges 2K a month on a 100K limit has not shown he can handle 100K of debt every month. also, getting back to your first sentence, how does the CC co know you have "good income and sufficient assets"? unless you are applying for a mortgage, it seems they have no idea what you make or what you have (other than your debt). since the wealthiest people (the people who should be the best credit risks) don't even have mortgages, the CC cos will not know what they make or have.