"Focus Spend" for LE?

[srikant]

Banks seem to give LE when we utilise their credit limit somewhat heavily.

"Heavily" seems to be something like "at least 30%" -- which is bad for CIBIL, right?

Is it still bad for CIBIL if we have other cards in cold storage?

If I have two cards, each with 1L limit, and I charge one of them with 50k -- is it "bad" for CIBIL at all? ("Bad" being defined as the level of bad that >30% utilisation is -- I know that even 30% isn't as good as 1-9%.) The utilisation on one of the lines is 50% - but the overall is just 25%.

 

[helloworld]

AFAIK, the whole reason of 30% rule is, in financial world one can only pay upto 30% safely every month without fail because remaining 70% needed for other expenses which includes fixed expenses (banks also usually check this 30% income as EMI most of the time before giving loan amount with required tenure).

https://www.hdfcbank.com/personal/resources/learning-centre/borrow/7-factors-that-determine-whether-your-loan-gets-sanctioned

(though this article mentioned about loan, you can replace with any credit type here - same rules)

It will settle down if you have 3+ years of CIBIL history, doesn't matter your utilisation ratio, if you pay all bills on-time and have moderate enquiries your score stays above 750.

Over time, you'll have more credit cards which obviously reduces your credit Utilisation ratio.

But always, consider this "never spend even 1rs. extra if you can't pay by month end", if it restricts 20% utilisation be it - you're not allowed to use more than 20% in that case.

 

[anirban.choudhuryanirban.choudhury is verified member.]

Banks seem to give LE when we utilise their credit limit somewhat heavily.

"Heavily" seems to be something like "at least 30%" -- which is bad for CIBIL, right?

Is it still bad for CIBIL if we have other cards in cold storage?

If I have two cards, each with 1L limit, and I charge one of them with 50k -- is it "bad" for CIBIL at all? ("Bad" being defined as the level of bad that >30% utilisation is -- I know that even 30% isn't as good as 1-9%.) The utilisation on one of the lines is 50% - but the overall is just 25%.

Banks generally give LE for low spends sometimes even no spend
If you are already utilising the card heavily , they don’t need to incentivise you by giving LE

 

[abhishek0882]

Banks seem to give LE when we utilise their credit limit somewhat heavily.

"Heavily" seems to be something like "at least 30%" -- which is bad for CIBIL, right?

Is it still bad for CIBIL if we have other cards in cold storage?

If I have two cards, each with 1L limit, and I charge one of them with 50k -- is it "bad" for CIBIL at all? ("Bad" being defined as the level of bad that >30% utilisation is -- I know that even 30% isn't as good as 1-9%.) The utilisation on one of the lines is 50% - but the overall is just 25%.

Personal experience - my overall credit utilisation is 2%, on any single card it never goes beyond 10%. I have never actively planned it this way but has happened organically. I only spend on those where I would have spent even if I was not using cards, what I mean is - no spends because there's some offer or to complete any milestone or to avail any discount. This has served me well. My credit score is more than decent and despite low utilisations, have received LE offers on most cards at frequent intervals. Interestingly, I have received maximum LE offers and most frequent ones from Kotak and ICICI, the two cards which I rarely, no, never use.