Quote Originally Posted by shamrockfan
Quote Originally Posted by Bretsky
I don't think individuals are penalized at all credit wise if they have access to 40G but only have balances of 2500. In reality the reason they have so much available is because their credit is good.
Far be it from me to argue with a banker, but I will!

I don't think that is entirely correct. Its not a serious penalty, but your credit score can be decreased for high outstanding available credit lines. I was real curious when the annual free reports came out last year, so I called and talked to a couple. One of the things I found out was that if you have a lot of unused credit cards, such that you could, if you were of a mind to do it, go out and charge $50,000 tomorrow using 25 different cards, you will lose some score points because of it.

The solution is simple. You call some of the unused card companies, and formally cancel the card. You can even request them to report that to the credit agencies.

It's kind of a Catch 22, though, because it also is not good if you have no available credit, or so I was told. It's good to have some, but not too much!
I can buy this, but rather than penalized "at all" I will preface by saying penalized "minimally".

I've witnessed scores dip hard after the fact when people who had a lot of revolving credit available used it.

And I have seen the message "too many revolving accounts" on credit reports so you are right in that it has some impact.

But to take things a bit further, most of the time when I see "too many revolving accounts" it is on a credit report with a person who has great credit.

And in the notes on each credit report, it lists reasons (normally four) of why you don't have a "perfect" score. And if there are no great reasons why somebody's score is 825 instead of 850 that seems to be the message it spits out on the credit report every time.

That being said, being responsible and making payments on time is most of what defines your credit.