Calling all professional mortgage lenders....hard question?

Hey everyone,

I just raised the limit on one of my credit cards because I was told that it would raise my credit score (things, such as debt, being equal ) based on my available credit to debt ratio. This CNN article seems to concur: http://money.cnn.com/galleries/2007/pf/0...

After telling my friend about this, whom has worked as a car salesman, he said he was always told by banks that a higher credit limit (used or un-used) would negatively affect your rate and the amount they could lend you, overall, getting a loan for a large purchase such as a house or auto.

I am in the process of eventually purchasing a house and wanted to know if having a higher credit limit would positively or negatively affect the rate and amount of this type of loan, even though it seems to have a positive effect on your FICO score. Any answers from professional mortgage finance professionals would just be icing on the cake.

Thanks in advance everyone.

I am a Mortgage Professional in CA. Raising the credit limit won't affect you adversely on a home loan or hurt your score, unless you have it extended over 30%. It may not help either though because often times the creditor reports the highest your balance has been rather than your limit. Keeping your balances below 30% of your available credit makes a big difference on your score and the better score will improve your interest rate on a mortgage, but otherwise credit limits do not improve or worsen the rate you will get.

yes, having higher limits raises your "I love debt score"

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