credit limit versus no pre set spending limit credit card
I’m posting this in case it helps someone else figure out their credit report.
My husband and I are buying a house. We obtained our free credit reports and I saw that his reports seemed to be clean. So we didn’t buy his FICO scores.
We got pre-approved for a mortgage and the loan officer sent us a copy of the credit report they pulled for him with the FICO scores from the 3 agencies. His scores are high, but I was puzzled because each agency listed “no recent revolving balances” as a factor for his score (I assume a negative factor). It was puzzling because we use a credit card for almost all our purchases, the Chase Amazon.com Visa.
This account is listed on the free credit reports as a credit card, and only on closer inspection did I see that no credit limit is listed. On the credit report from the lender, the Chase card has listed under “MOP” (method of payment) the term “O-1.” I googled this and found out it means “open line of credit” also known as a NPSL (no pre-set spending limit) card. On the lender credit report, the amount we charge on this card is listed as “other” under account type and not under “revolving.” So he had $0 considered for a revolving account balance. I’m thinking this put his utilization ratio at 0%.
Maybe if we had bought his FICO score from this site, we could have used the score simulator to figure this out, but because his free report looked pristine, we didn’t bother. I probably would have made sure to charge at least a small amount on one of our other credit cards, one that actually is reported as a revolving account with a credit limit, prior to applying for the mortgage.