[somebodys sister]

I use an American Express card for all my living expenses and pay it off in full every month. I spend about the same each month, so my current balance always about the same. The card has no set limit. I'm rebuilding my credit, monitor my score often, and plan on applying for a mortgage soon

Does anyone know if and how these habbits play into my credit used/available credit ratio?

[Dr D]

Since AmEx has no pre-set limit, your previous high balance will be used to compute the % of credit use. If your previous high balance has been let's say $3000 and your balance when the mortgage lender pulls your credit is the same, the percentage will be about 100%, which will adversly affect your FICO score. Capital One does not show their credit limit on credit reports, which falsly hurts the scores of their customers. There is presently a lawsuit against all three bureaus as a result. My advice would be to use the AmEx card to no more than 25% of your previous high, for at least a couple of months prior to your mortgage application. I do mortgages for a living.

[wildcatgirl]

Do you also have any other revolving (credit cards) or installment (loans) that is available to you on your credit report?

[somebodys sister]

Do you also have any other revolving (credit cards) or installment (loans) that is availble to you on your credit report?

Yes, I have both.

[wildcatgirl]

Good--the best thing to help your credit score more than anything is some history of both types of credit on your report. Even though your re-building your credit and may be paying a little higher interest rate on a car loan, the banks and the bureaus like to see that history. Just keep up the good work! The one thing I can suggest is that you may want to watch to make sure you don't get too much credit available to you. If you have a Chase card for instance-they LOVE to raise your limit--and they report it to the credit bureau. Before you know it, you could have a $20,000 credit line available to you on your credit report. If the lenders see that and a previous credit deliquency, it may make them leary. If your not using all of your available credit on your cards, you can simply call them and tell them to cap your limit at an amount you feel comfortable paying off every month.

[Dr D]

I respectfully differ with wildcatgirl. I just reviewed my list of FICO Factor Codes, and was unable to find one indicating that Credt Limits Are Too High, while finding several Codes finding a problem with Too Many Revolving Accounts or Too Many Accounts With Balances. I would advise against having the credit limits reduced for individual cards, while advising anyone to close excess revolving accounts, being sure not to close the oldest trade lines. Closing old credit accounts will shorten your credit history and can cause the score to drop.

[wildcatgirl]

I respectfully differ with wildcatgirl. I just reviewed my list of FICO Factor Codes, and was unable to find one indicating that Credt Limits Are Too High, while finding several Codes finding a problem with Too Many Revolving Accounts or Too Many Accounts With Balances. I would advise against having the credit limits reduced for individual cards, while advising anyone to close excess revolving accounts, being sure not to close the oldest trade lines. Closing old credit accounts will shorten your credit history and can cause the score to drop.

I agree on the oldest trade lines--it shows you have history. And, I agree with the too many revolving accounts or accounts with balances. But, after reviewing my own credit and lowering my available credit on a few accounts and closing a couple I never use, my fico score went up quite a bit. I don't know which one helped more, but it worked.:)

[Dr D]

Dear wildcatgirl. Since you closed old, seldom used accounts, AND reduced your credit limits, we can speculate about which action caused your score to go up. I would put my bet on closing excess accounts. I have been trying to decipher the wonderful world of FICO scoring for perhaps the last 10 years, ever since that tool was introduced to the mortgage industry. I am often amazed, but I believe that I have a fair grasp of how the labyrinth works. I stand by my earlier post.