I have received a letter from my credit card company increasing my credit line and when I spoke about this with a co-worker, they told me that I should request that the company does not increase my credit limit because it was bad for when I want to get a mortgage. I have low credit utilization which I think is strengthening my score. I pay my balance in full usually the same month that the balance accumulated.

How does having an increased credit line effect when I want to take out a mortgage? Does it mean I pay more on the mortgage?

1 Answer 1


Your coworker is mistaken. A higher credit line is fine especially if you have zero balance. If you happen to carry a balance at the time of mortgage application, then a higher credit line will mean you have a lower utilization. A lower utilization will mean that your credit score will be better than if you had a higher utilization.

I know someone who just got a mortgage for 3.65% with a DTI of 41%, one late payment from two years ago and a short sale on their credit report. With what you are telling us, your mortgage application should not be a problem. Ensure you have adequate reserves (3-6 months of income) either in your bank account or 401k.

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    I have one caveat: don't ask for an increase. That could make the lender nervous. They don't like to see somebody trying to sneak in new credit lines in the middle of the mortgage process. Sep 16, 2014 at 21:27
  • @mhoran_psprep: Yes, I specifically was referring to pre-application and pre-underwriting. Sep 17, 2014 at 12:11

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