General Credit Topics

[lkenney]

The CRA's have a class action lawsuit against them because they allow Capital One to NOT report a credit limit.  This can affect a consumers score by as much as 50 points!!!!

 Here is an excerpt from an article in the Washington Post:

Say your most recent balance on the card was $2,000. That appears to be a very high usage of credit when your substitute limit is just $2,500, not the actual $5,000. Now you appear to have a utilization ratio of 80 percent and your credit score could be depressed significantly -- 20 to 50 points or more -- according to Terry Clemans, executive director of the National Credit Reporting Association.

A 50-point decrease could mean a 1 percentage point difference in your mortgage rate quote, according to Fair Isaac's MyFico.com Web site. On a $216,000 fixed-rate, 30-year mortgage last week, an applicant with a 660 FICO would typically be quoted 7.07 percent, or $1,447 a month in principal and interest. An applicant with a 610 FICO would be quoted 8.05 percent, with a payment of $1,592, or $145 more.

[trinigal]

I heard people on here mention the no credit limit reporting, and sure enough, it's true, my reports prove it.  Total bollocks!!! It is time someone did something about them.

That account is "designated to close" as soon as it's payed off. I was thinking to ask them to keep it open as it's one of my older cards, but based on what I'm reading about them here, I just need to go ahead and put this account down.  They suck!

[lkenney]

Even though they're total scum, don't close the account. Just cut up the card and forget the number.  Closing the account will most likely drop your score.

[masdeocho]

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lkenney wrote:

The CRA's have a class action lawsuit against them because they allow Capital One to NOT report a credit limit.  This can affect a consumers score by as much as 50 points!!!!

This doesn't make sense to me.  Can you provide a link?

CapOne has no legal obligation to report info to CRAs, only to correct wrong info it previously reported.  So it has no duty to report CLs to any CRA.

The CRAs' obligation is to report the information provided to them by creditors.  It's not their duty to tell creditors like CapOne that they have to provide more information about consumers. 

[lkenney]

Here's a link to WP archives posted July 2006.

http://pqasb.pqarchiver.com/washingtonpost/access/1070135331.html?dids=1070135331:1070135331&FMT=ABS...

The CRA's base Your score on available credit.  By them allowing Cap One to Not report the CL, they are in violation of the FCRA.   If you have a Cap One account with any balance, your score has been compromised, losing as much as 50 points.  Think what that can cost you.

[masdeocho]

Thanks for the link.  I understand the issue of CapOne not reporting CLs and the effect on your score.

The Washington Post article (only part of it is available) confirms what I said -- that CapOne is not required to report CLs to the CRAs.  Unfortunately the part of the article which explains why the CRAs are doing something illegal is not accessible.

"Capital One is not named as a defendant in the suits. Under the prevailing, voluntary credit system in this country, no federal law requires it, or any other lender, to report any client's data to any bureau. However, federal law does require the credit bureaus to strive to be accurate, and [William A. Harris Sr.]'s suits argue that Equifax, Experian and TransUnion are not in compliance."

Message Edited by masdeocho on 06-25-2007 12:30 PM

[lkenney]

Since Cap One refuses to report CL's, the CRA's should not be accepting ANY of their reporting because it causes the CRA's to be in violation of the FCRA.  Hence: "Federal law does require the credit bureaus to strive to be accurate, and [William A. Harris Sr.]'s suits argue that Equifax, Experian and TransUnion are not in compliance."  The CRA's default to a $0 credit limit, if there is not a "high balance" to use.  My credit limit with Cap 1 is $4500.  My high balance is $1800.  Until I knew what Cap 1 was doing, my balance was $1400.  This made my credit score drop significantly.  There is nothing "FAIR" in this reporting.  Consumers have paid out millions more on their mortgages and other loans than they should have.  Many consumers have gotten turned down when they should have been approved.  A lawsuit, in my opinion, is not good enough punishment.

[KevKaos]

I have a question regarding this.  What happens in a case like mine where my CL was/is $900 and my highest balance was say, $850 and the current balance is 0 and will stay that way. IAm I  being hurt  or am I being helped because I have a $0 balance on a $900 CL?

Message Edited by KevKaos on 06-25-2007 10:15 AM

[lkenney]

Do not close the account, but don't use it.  Cap 1 does not deserve another dime from you or anyone else.  Closing the account will most likely hurt your score.

[Noah_Bodie]

masdeocho wrote:

CapOne has no legal obligation to report info to CRAs, only to correct wrong info it previously reported.  So it has no duty to report CLs to any CRA.

Accuracy and completeness matter. If the information reported isn't accurate or complete, then the furnisher (Cap 1 in this case) is in violation. I think a layperson could easily make the case that failing to report CLs makes the TL incomplete and harms the consumer.

http://caselaw.lp.findlaw.com/scripts/ts_search.pl?title=15&sec=1681s-2

15 USC 1681s-2

(b) Duties of furnishers of information upon notice of dispute
(1) In general
After receiving notice pursuant to section 1681i(a)(2) of this title of a dispute with regard to the completeness or accuracy of any information provided by a person to a consumer reporting agency, the person shall -
(A) conduct an investigation with respect to the disputed information;
(B) review all relevant information provided by the consumer reporting agency pursuant to section 1681i(a)(2) of this title;
(C) report the results of the investigation to the consumer reporting agency;
(D) if the investigation finds that the information is incomplete or inaccurate, report those results to all other consumer reporting agencies to which the person furnished the information and that compile and maintain files on consumers on a nationwide basis; and
(E) if an item of information disputed by a consumer is found to be inaccurate or incomplete or cannot be verified after any reinvestigation under paragraph (1), for purposes of reporting to a consumer reporting agency only, as appropriate, based on the results of the reinvestigation promptly -
(i) modify that item of information;
(ii) delete that item of information; or
(iii) permanently block the reporting of that item of information.