03-04-2009 09:11 AM - last edited on 03-04-2009 09:18 AM by sidewinder
I wish I had known this before I opened the account as now the inquiry alone is going to haunt me for two years. I'm probably going to close the account, since it's not adding to my available credit. I have a small balance on it now and it is severely hurting my credit score since my only other card has a very small limit. It seems pointless to keep an account that I can't use. I guess having it as an open account with good payment history is better than nothing, but not by much. Be careful when an associate at a place like Firestone or Plaza Tire Service asks if you'd like one of their cards. If it's CFNA make sure you consider the fact that any balance you carry will hurt your score rather than help it because they do not report credit limits! They take away from the available credit in your debt to credit ratio without adding anything to it. Here is some correspondence I've been working on with one of their representatives.
This explanation for not reporting acredit limit makes no sense to me.
When a credit limit is not reported tothe credit bureaus, they put "0" or "unknown" by default. Thus, it appears that any balance at all is above the credit limit which as you said has an extremely negative impact on the debt ratio and credit score.
By not reporting a credit limit, abalance of $1 is an infinitely negative debt to credit ratio for thataccount.
If nothing can be done about this, I will be paying off my card and closing the account immediately to ensure that CFNA makes no money off this account. I opened this account to help raise my credit score, and would have managed it extremely responsibly. However, it is impossible to keep a reported debt to credit ratio on an account less than the ideal amount if there is no credit limit reported. My FICO score dropped drastically, because the credit is being reported as a $159 balance with "0" or "unknown" credit limit.
If no credit limit is reported to the bureaus on this account, any balance at all that I carry on it has a negative effect on my overall debt to credit ratio. My only other credit card has a very low limit, so at this point it looks like my overall debt to credit ratio is over 75% which is a horrible ratio and has an extremely negative impact. It dropped my credit score by over 20 points with two of the bureaus. My overall debt to credit ratio is actually 11% which would have an extremely positive impact on my credit score. The difference is night and day. I'm lucky I did not charge over $200 on this card, or the bureaus would see my debt to credit ratio as over 100%!
Please let me know if you will be able to report my information to the credit bureaus properly, or if I will need to close this account to keep my credit in a positive standing. I can not afford to use an account that hurts my credit score so badly if I carry any balance on it. If this account can not boost my available credit with the bureaus, it is doing more harm than good.
I sincerely want to keep this account as I saw it as a way to help improve my credit score. As I stated, I have every intention of managing it responsibly and I have had a perfect credit history for the past two years. With a card like this and my continued efforts at removing inaccurate information from my credit reports, my score will be strong in the near future.
Thanks for your time,
Sent: Wednesday, March 04, 2009 10:20AM
Subject: RE: General Questions
March 4, 2009
Ticket Reference #74358
Thank you for your recent inquiryregarding your credit card account.
Our Company does not report creditlimits to the credit bureau, we
report high credit only.
We report high credit because wefrequently approve sales over the
customer's established line of credit. A balance that exceeds a credit
limit could have a negative impact on acustomer's debt ratio, and could
affect the overall credit score.
Credit First National Association
I recently opened an account, and havea question about the information
sent to the credit reporting agencies. I am not aware of how this
account appears on Equifax, but it'sinformation on TransUnion and
Experian has me a bit concerned. TransUnion is showing the credit limit
as zero, and Experian is showing it asunknown. My credit limit is
$1200. Having a balance with azero/unknown credit limit is hurting my
credit scores badly. Does CFNA notreport the credit limit, or is this
an oversight by the credit reportingagencies?
03-04-2009 09:15 AM
The spouse has a CFNA and it doesn't report a limit either. Recently, after a flat tire on the side of the road, the spouse used it to buy a tire. Now, the limit reports the same as the high balance.
I believe, when there is an absence of credit limit, FICO uses high balance for CL. I could be wrong and will do some double checking.
In the meantime, I am going to move this thread over to CC forum, as they'll know for sure over there.
03-04-2009 09:21 AM
Here is a reponse to a similar post;
CFNA reports the high balance, but it is ignored when your total CL and available credit are computed. For example, say your CFNA card has a $3000 CL, a high balance of $1000, and a current balance of $0. You have 4 other cards that have a total balance of $3000 and a total CL of $9000. The CRA will report your total available credit as $6000 (from only the 4 other cards), not $7000 or $9000. Your utilization will be computed as 33%, not 30% or 25% ...
03-04-2009 09:30 AM - edited 03-04-2009 09:34 AM
I just got another response from CFNA regarding this issue, and it certainly wasn't very helpful.
I am sorry, I can only advise again that our Company does not report
not required by law to report any credit limit.
Unfortunately, I sent my response before I saved it. I basically told her that they are not required by law to provide adequate customer service either, and that was very evident. Fortunately, the companies that provide customer service are the ones that stay in business. I let her know I will be making everybody aware of this policy CFNA has on all of the message boards and threads of the companies they provide credit cards for as well as these forums.
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