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Frequent Contributor
Cleanmachine
Posts: 398
Registered: ‎04-30-2008
0

Re: Identifying what triggers CLDs. Paid minimum payment 3 times in a row hit with BIG CLD.


ilovepizza wrote:

Cleanmachine wrote:

.....and if you are not making any progress in lower this debt, this "may" cause a credit line decrease along with other adverse action.



Exactly what happened. I continued to use my credit card increasing the debt monthly while allowing auto pay to debit the minimum. I knew I wouldn't be late on bills with auto pay but didn't expect this simple action to trigger a CLD. The amounts growing may be 100% more debt each month but the over all $$ amounts were minimal.

 

I see what you are saying, my debt while small was growing not shrinking.


You hit the nail on the head.

 

They really look at your overall debt on all cards and want to see decreases from last report.

Established Contributor
Revike
Posts: 720
Registered: ‎05-04-2007
0

Re: Identifying what triggers CLDs. Paid minimum payment 3 times in a row hit with BIG CLD.


haulingthescoreup wrote:

ilovepizza wrote:

Maybe... They told me it was my activity when I tried to fight the CLD.

 



pizza, which bank was this, and what percentage of your CL did you lose? (if I may ask)

+1

 

Which bank, and how large was the CL originally? And exactly how did they refer to "your activity" causing the CLD?

 

As has been reported many times, CSRs often give "reasons" that are nonsense, attempting to make it appear that adverse action was "caused" by the customer. This is especially true when the CCC is taking widespread action (for example, BOA recently).

 

I like to figure out triggers and reasons as much as the next person, but it is pointless to do so when the action being taken is so widespread. Banks are not punishing customers who have been "naughty", and bypassing customers who have been "good". Customers with total utilization of less than 1% have been hit with CLDs. Customers aggressively paying down balances have been hit with CLDs. GEMB, HSBC, and BOA (just to name a few) have done sweeping CLDs across the entire spectrum of customer profiles. The CCCs are not microscopically analyzing individual payment patterns before doing CLDs and RJs ...

Senior Contributor
smallfry
Posts: 4,831
Registered: ‎04-20-2007
0

Re: Identifying what triggers CLDs. Paid minimum payment 3 times in a row hit with BIG CLD.

[ Edited ]

 

 

 

 

Juniper cut me from 13K down to 2K last November for not enough usage. While I never used very much of the limit I did use the card at least every other month sometimes more but only to the tune of c. $300. It felt good to close them. I did not need the card for any reason and since it was one of my newer cards on file it has no adverse effect never will.                                                                                                                                                          Citi cut the limit on one of my Citi cards from 15K down to 2K. Closed that one as well for the same reasons I closed down the Juniper.                                                                                                          I always pay all my accounts in full every month and make multiple payments on my outstanding car loan. So if any of the issuers are paying attention they can clearly see that I am not a customer in any imminent danger. 

Message Edited by smallfry on 04-28-2009 06:04 AM
Senior Contributor
ilovepizza
Posts: 3,071
Registered: ‎05-17-2007
0

Re: Identifying what triggers CLDs. Paid minimum payment 3 times in a row hit with BIG CLD.

I'm on the see saw with BOA. CLD - CLI - CLD - CLI. It seems that every so many months they just chop me 50% or more. I ask for a CLI then they take it right back. They keep telling me it's automated and can't be stopped. Then they require me to apply for a new CLI each time if I want a CLI as if it were the first CLI.

If we never set higher goals we would never get as far.
sol, credit 101, acr, abbreviations, calc
Established Contributor
Revike
Posts: 720
Registered: ‎05-04-2007
0

Re: Identifying what triggers CLDs. Paid minimum payment 3 times in a row hit with BIG CLD.

Bank of America is in the process of reducing their commitments (total credit limits granted) by 50%-55%, which is something in the neighborhood of $500 billion. Obviously, in order to do that, CLDs are going to be applied to the vast majority of their customers, regardless of their history, payment record, purchasing pattern, or score. If they plan all the CLDs necessary to meet their goal, and then agree to rescind $50 billion of the CLDs (for example) to placate some of the customers who call, that means they will need to eventually CLD another $50 billion. They must reach their target one way or another, and very few of their customers are going to be unaffected. As I mentioned earlier, the massive amount of CLDs required means they are not analyzing individual accounts - instead, they are creating computer algorithms to take back big chunks of CLs wherever available. In some cases, that means 50% of unused CLs, in other cases, that means chasing balances.

 

Citi is in the same situation, needing to reduce commitments by about 50%. Chase and Amex are in slightly better situations and need to reduce commitments by about 30%-35%. So don't waste time trying to figure out "why me?" - these banks are using machetes, not X-acto knives.

 

Also, keep in mind that, when it comes to utilization, what is good for the banks is the opposite of what is good for customers. If a bank has $200 billion in loan balances and $1 trillion in total commitment (credit limits), that's 20% utilization and $800 billion in additional potential exposure. If they reduce their total commitment by 50%, that reduces their additional potential exposure from $800 billion to $300 billion, which makes their balance sheet appear much less risky. The fact that this causes the average customer utilization to go from 20% to 40% has no relevance to them ...


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