04-13-2011 12:52 PM
I have a question for anyone here that can advise.
I have a Kay card with an initial limit of $4000 when I first applied. I wanted to make a large purchase over that amout and the sales rep called Kay and got the approval over the $4000 for total amount of item including taxes ($5800+). This was in November.
My last EQ report stated a high balance of $5383 (Jan 2011), but since then, I have paid that down to an $1500, but on my Kay account the difference from what I owe and what was paid is the initial credit limit of $4000. I am worried that the reporting of Kay of a higher balance than available credit will affect future credit.
Has anyone had this happen to them? Will it look bad on my reports or am I worried for nothing? I plan to pay off the balance next month (and all my other cards) as I would like to raise my scores (main reason for 660 scores is high util) so I can then apply for prime cards (Citi AA) a few more months down the road.
Any comments would be appreciated.
04-13-2011 01:12 PM
From what I know, if Kay allowed the purchase to go through over your $4,000 limit without actually increasing your CL, then that is bad. Similar situations occur with loans where the outstanding principle balance is set at say, $10,000; but after interest (and no payments), the balance can inflate to $10,250, for example. With util in excess of 100%, your scores will see a drop. However, it sounds like you have already paid down the balance well below your $4,000 limit, so I imagine your scores will rebound quite a bit after a month or so.
As for the high balance exceeding the CL, I am not sure how this will affect you since the card's current balance is below your CL. You might try asking for a CLI, but if Kay does a hard inquiry to approve you for this, it might be best not to request it to avoid the inquiry. Perhaps other more knowledgeable members can give you some better advice on this.
04-13-2011 01:16 PM
In terms of fico score, you should be fine once your current balance is below your current CL. The only problem arises when it comes to manual review (where they may think that you went over limit. If you get denied for some credit later, you can do a recon and explain this. I wont worry too much about it.
04-13-2011 01:30 PM
Thank you for the replies.
I just got off the phone with Kay, and unfortunately my limit is $4000. CSR said they extended the limit for this one time purchase and that they do reviews every 10-12 months or you can request a CLI in person or at a Kay location. I don't plan to do any such thing. This was a one time purchase.
I do hope my scores will take a nice jump next month after paying the balance off. I paid this off in 4 months (yay). My goal is to eventually get a prime card, sometime in the summer
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions based on Experian or Equifax data (additional FICO® Score versions based on TransUnion data are not currently available on myFICO.com). Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.