Calculating CC utilization percentages

[Anonymous]

I understand that a great impact on my score is the credit utilization of my credit card balances versus credit line. My problem is this. I have numerous credit cards (in good standing) and when the CC card reports they refuse to report my credit limit. I was advised that the bureaus and fico would alternatetly use the high credit reported. In some cases the CC company does report the high balance and on several they do not even report that. (CITI, BofA) Consequently this forces my utilization up to approx 50% when if they calculated my utilization using either high balance or limit it would be close to 15% What can I do?

[haulingthescoreup]

Do you have a lot of Signature (Visa) and World (Mastercard) cards? This is a serious problem with them. It can also happen if you have uber-high CL's --$40K+ --but with these, the entire account is ignored for util purposes.

One option, reserved for the bold with a bunch of cash in hand, is to wait for your statement to post, and then go buy something that costs nearly as much as your credit limit. Make sure it shows up on your account, and then return it before the next statement posts. Or if it's a car, get a loan and move the debt over to a car loan. The truly bold will do a cash advance for the high figure and then pay it back immediately, incurring a relatively small fee in the process. All these actions will create a high credit reported that's close to your CL, creating better util.

If you do the cash advance tactic, I would first call your lender, escalate to a specialist, and tell them that you are going to do a huge cash advance and why. Many lenders (think American Express) freak out at big cash advances and will CLR you or close you outright, thinking that you're in the middle of a financial disaster.

If you can't stomach this (I just took a few Tums thinking about it), investigate whether your cards can be switched to non-Signature/ non-World cards. Not all Signature and World cards do this, but many, many do.

What makes me mad is that there is a code that lenders can use to make these report properly, but they just won't do it. We have posts that are easily two years old dealing with this mess --look for posts by Dawn and psychic. It's truly a PITA. Good luck!

[Anonymous]

So what can I do in the case of the CB having the high credit but not using it to calculate the percentage.?

Can I demand that the CC report bot the CL and HB?

[haulingthescoreup]

We've had members fighting this battle for two years now, and so far, any victories have been very temporary.

The fact that it's a no-preset-limit card --you have a CL, but you can exceed it --means that they don't report the CL, or at least, that's their reasoning.

Consumers have argued bitterly with CS over this, and all I can figure out is that the CSR's must get a heckuva bonus for signing people up for these, because they sure do push them. Try calling your bank and asking to escalate to a specialist, and see if they can do anything.

btw, not all Signature and World cards do this. I have a MC World from USAA that reports fine, and another member has a FiA/BOA Signature Visa that does report. But most don't.

[Anonymous]

Am I correct in understanding that if they do report the high limit correctly that the Credit Bureau should be taking this into consideration?

So should I not use these cards in the future and get them replaced with cards that report CL correctly correctly? I hate to give business to companies that do not want to take care of my needs.

One would think at times that this might be part of a master plan to keep scores lower in order to get higher interest rates???

[haulingthescoreup]

One of our former forum members found that there's a code which could be used to make these report properly, but very few lenders do so. She could get hers to report the limit one month, and the new month, it would be back to reporting high balance.

One option is to use the card to buy something that costs nearly the CL, or do a cash advance for this figure, and then immediately pay it off before the statement drops, so that it will be reported as a new high balance, but not as a current balance. AmEx only reports statement balances, btw, so this tactic won't work for them.

For instance, if you were getting ready to buy a car, you could arrange your financing first, use the CC for payment, and then activate the car loan by transferring the charge over. I sort of did this when I wrote a check out of my HELOC for a car, and a few months later, got a car loan from PenFed. Instead of sending the payment to the auto dealer, PenFed sent it to the holder of my HELOC.

If you wanted to do the cash advance option, I would highly recommend calling the CCC and speaking to a supervisor, explaining what you are about to do and why, and that you will immediately pay it off. Be sure to get this person's name and employee number. Big cash advances seem to set off fireworks in the risk management departments, and people have had cards closed or had to go through unpleasant financial reviews after doing cash advances.


eta: I doubt it's part of some grand scheme to suppress FICO scores. I'd say it's more like a case of the issuers neither knowing nor caring about the impact of sloppy reporting.

Message Edited by haulingthescoreup on 10-25-2009 08:04 AM