Credit limit & Credit Inquiries

[Ramakant]

Hello. I got my first credit card (non secured) from Bank Of America sometime in Feb 2012 and till date I have paid the outstanding bills in time (a total of 3 bills). My credit score started to build from 3 months ago only and BOFA gave me credit card based on no bankruptcy or default + income and other expenses criteria. I have the following question:

1. I want to increase my credit limit as the current limit is very low. When I asked the bank to increase the credit limit citing timely pay etc, they informed me that they can increase my credit limit only after inquiring the credit score. I want to know that inquiring for credit score to increase the credit limit will be considered as hard or soft query as I don’t want my credit score to decline for hard query.

2. I tend to keep my credit usage to 30-35% of my credit line. However in case I exceed this limit , I tend to pre pay the amount before the billing date so that actual credit usage is still within the targeted limit. For ex, assuming my credit limit is $100 and for a particular month, I spent $60 then before the bill got generated, I paid $30. because of this, the outstanding amount was $30 when my bill got generated. Would like to know what will be the amount reported to credit bureau for my credit usage? Will it be $60 or $30.

Thanks a lot in advance for the help.

[Tracy Winters]

You need to wait a few month for a limit raise

First, you don’t even have a score yet. It takes at least 6 month to start scoring.

Second, I’d wait a little before asking to raise your limit, at least 6 month.

A single hard inquiry will only lower your credit score by a few points. Nothing to worry about.
The inquiry will probably go down as a soft inquiry, because you already have business with them. Maintenance inquiries by creditors are soft inquiries. They will appear on your credit report but are not considered by Fico.

The best way to get your credit limit raised is to use most of your limit, wait for the statement and pay it in full every month. Some credit card companies will even raise your limit automatically, but you can also ask for it. But wait a few months. It’s too early now.

As to your second question, the amount reported to the credit bureaus is the same amount your balance shows at ever month closure. It would be $30 in your case.

Hope this helps.

[Author]

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