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New Member
Posts: 2
Registered: ‎03-26-2007
0

How are credit card spending limits factored into ones score?

I have been hearing about certain credit card companies not reporting a credit limit, but instead reporting a "high" limit. I have been told that these "high" limit reports can be derogatory to ones credit, because whatever "high" limit is reported appears that the cardholder has maxed out that account even it only has a few cents on the balance. If this is the case, should I be carrying a zero balance with these particular companies?... ie. Capital One?
Moderator Emeritus
Posts: 5,436
Registered: ‎03-10-2007
0

The trick to a card like C1 is to max it out and pay it o...

The trick to a card like C1 is to max it out and pay it off before the statement reporting date.  It will show your 'high balance' which is sometimes substituted for the credit limit in scoring models though I've heard some models totally disregard cards that don't report limit when factoring utilization.
 
If you pay it off after it reports, or your statement date, You take the chance that it will show maxed out for several cycles.  I bought mine to zero two cycles ago and it has yet to update.  Still showing a reporting date from two months ago.

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