Until recently, I worked for an insurance company that utilized credit scoring. Although our actuaries swore up and down credit was a valid measure of insurance risk, they were never able to explain “why” to my satisfaction. Furthermore, it is nearly impossible to understand how our actual score is impacted by real world situations.
For example, Citibank decided to raise the limit on my credit card without asking me. Since I pay the bill in full each month, I do not need the increased limit. L
Should I call Citibank and request a decrease in my credit limit? Would it increase or decrease my FICO score?
Based upon what I have heard, the higher, unused, credit limit will tend to increase my credit score; however, I have heard excessively high credit limits can reduce a credit score.
Of course, our friends at Fair Isaac will not tell us the “answer” because their algorithms are proprietary.