CRAs contacting lenders

[Reighn9]

Are the CRAs supposed to contact lenders unsolicted and alert them to your credit factors? Experian alerted one of my creditors to credit factors (which haven't changed in a while) and my credit limit was lowered because of it. I am wondering if this is the underlying factor in other limits being lowered.  

[Anonymous]

CRAs do not contact creditors, lenders contact CRAs. Your credit card company can “soft pull” your credit at their will (especially since you have an account with them). You say; “Experian alerted one of my creditors to credit factors (which haven't changed in a while) ...” As previously stated EX did not alert your creditor, your lender probably pulled your report of their own volition.  When you state that your credit factors haven’t changed in a while, did they significantly change, for the worse, within the last 6 months or so? Your bank (CC lender) can lower your credit limit for a multitude of reasons, but the most common are:

1. Your overall DTU has significantly increased. This is usually a result of a new pattern of utilization begun by you.
2. Other factors on your credit report have significantly, negatively changed.

Even though the above factors may have happened a while ago, that does not change the fact that they happened and were not adjusted. I don’t know your situation; however, let’s say 4 months ago you stated using more credit than you did for the past few years. You were never late, always paid more than the minimum payment and felt all was fine. Nevertheless, you maintained this high DTU for the last four months. As a result, your CC may have seen this situation 4 months ago and did nothing but monitor you. Now they see that you have not significantly returned to your previous pattern. If you were a marginal borrower to begin with, they may now reevaluate their risk exposure. Their action may be to lower your limit; but in some cases banks close the account completely.  

The best way to find out is to look at the soft pulls on your credit report. You will see the date of their examination and if it coordinates with when they lowered your limit (or you see a few pulls in a row over a period of several months by the same bank), then you can feel fairly confident what I stated has merit.

Good Luck

[Anonymous]

Some lenders are switching from FICO Score 8 to FICO Score 9 and you may have a different score between the two algorithms.  There were some posts here in the past month regarding credit limit decreases from a certain lender based on them changing from one algorithm to the other and their score dropping enough to affect their credit line.

Lenders definitely have a contractual right to "soft" pull an inquiry from your credit reports to check on you.

[RobertEG]

FCRA 604 lists all of the permissible purposes for which a party may obtain your credit report.

One of the permissible purposes is for existing businesses and creditors to monitor their customers.  See FCRA 604(a)(3)(F)(ii).

As stated by others, those inquiries are requested by the business or creditor.

A business or creditor will often generate their own internal triggers based on changes in their own accounts to then pull a consumer's credit report to also review reporting of other creditors and businesses.  Those internal account reviews may often then be used to trigger account closures, credit limit reviews (increases and decreases), etc. or to make civil suit determinations.

[Reighn9]

I replied to this post yesterday but my post seems to have disappeared.  Here is a copy of that reply: 

"I went in to the bank and a banker personally called the number on the letter reporting the credit line decrease, and the credit analalyst told her Experian contacted them with the information. He insisted they did not do an annual or routine review, the account was reviewed based on an alert received from Experian. My DTU has been high for a while and doesn't improve much when I pay down accounts who in turn drop the credit line so instead of utilization being near 30% it's back up to 94%. You can't have inquiries removed you didn't request. I got inquiries from asking questions and someone misunderstood, and I got one when I was told a report was not being pulled, and then there are the 15 auto inquiries that are never counted as one. I am never late, I always pay more than minimum. I think the reasons were "revolving balances too high compared to limits" Too many inquires last twelve months" Too many accounts with balances" "Too many accounts opened recently". This is what the reasons have been for 2 years minimum. No one will tell you what is "too many". I have 3 accounts under 2 years, an auto loan, and 2 pre-approved cards that were sent to me because the old company changed hands, so I was sent a card from the new company. The only one I applied for was the car. I have tried to get inquiries removed, and I am told they can't be. My FICO 8 score has actually gone up but this lender is using Bankcard 2 which is lower than FIco 8, but not significantly lower than its high point (bankcard 2). I f the lender can do soft pulls to check on you why do they have to do a hard pull to restore a credit line they dropped? They credit analyst told my banker he would check into restoring the line but it would be a hard inqiry. When I declined he told her I had 30 days from the date of the letter to request restoration."

 I was wondering why no one had responded.

When I tried to post this I received this message "Your post has been changed because invalid HTML was found in the message body. The invalid HTML has been removed. Please review the message and submit the message when you are satisfied." I can't see where anything changed and I didn't think I used any HTML at all.

[Anonymous]

You said: “Too many inquires last twelve months. Too many accounts with balances. Too many accounts opened recently…No one will tell you what is too many.”

Inquiries Past 12 Months

FICO states: “…70% of FICO High Achievers did not apply for credit in the past year.” Two recent inquiries in the past year is still considered fair (as per my personal report).  So you can fundamentally say that too many, in this case, is two or more.

Accounts with Balances

FICO states: “FICO High Achievers have an average of 3 accounts carrying a balance.” Once again you can sermise from their statement (FICO) that more than 3 is too many.

Accounts Opened Recently

By this statement I believe you mean the age of your accounts. FICO does not talk about accounts opened recently, but does measure the age of your accounts. If this is an accurate assumption, then FICO states: “FICO High Achievers opened their most recent account 2 years 6 months ago, on average.” If you combine this with FICO’s Length of Credit History, FICO states: “Most FICO High Achievers have an average age of accounts of 9 years or more.”  So, you can be fairly sure that if your most recent account is below 2.5 years AND/OR your average account age is less than 9 years, you will take a hit by having too many.

As for your statement “I went in to the bank and a banker personally called the number on the letter reporting the credit line decrease, and the credit analyst told her Experian contacted them with the information;” I cannot not argue what you were told. However, I will say this. “Experian collects and aggregates information on over one billion people and businesses including 235 million individual US consumers and more than 25 million US businesses.” https://en.wikipedia.org/wiki/Experian

Think of this fact. There are 86,400 seconds in a day. That is 31,536,000 seconds in a year. If Experian contacted every lender for US consumers ONLY and they did it only ONCE a year, that would require Experian to contact 7.45 lenders EVERY SECOND! That means 60 seconds per minute, 60 minutes per hour, 24 hours a day nonstop for 365 days a year – no holidays or weekends. It simply does not make sense that they would contact your lender or any one else’s. You banker was probably trying to pull a fast one over on you and DENY his/her/their responsibility.

Y

[Anonymous]

PS

The above data analysis further assumes that each consumer (you, me and the rest of us non business entites) has ONLY ONE lender for Experian to contact.  Once again it does not make sense.

Y