Valued Contributor
TheNewWorldMan
Posts: 2,374
Registered: ‎03-15-2007
These "no limit" cards are a pain in the rear w...
[ Edited ]
These "no limit" cards are a pain in the rear when it comes to utilization...CapitalOne is one such card. From what I understand, this is the workaround to use:

1. Charge a high balance...now be sure to leave yourself some headroom for finance charges and the like. Most cards DO have a limit, even if this is not reported to the credit bureaus...be sure you don't exceed yours.

2. Wait for this balance to be reported to the CRAs. This will then become the maximum balance, which for utilization functions as a limit. Nota bene: your FICO will take a temporary hit, because for that reporting cycle, your utilization on that line of credit will be 100%.

3. Immediately pay down the card balance to $30 or so. This will be just enough to get a monthly bill, and we all know how credit bureaus love to see you pay your bills on time.

4. Your utilization will then drop to a small fraction...if the high-water mark you set in Step 2 is, say, $989, your utilization would be around 3-5%. Your credit report will then indicate you have a balance of $40 on a credit card with a $989 limit. Your FICO should rebound, probably to a bit higher than it was before, since your credit report will reflect you have more credit, and a lower utilization percentage on that account than before.

Message Edited by TheNewWorldMan on 03-30-2007 11:03 AM

Message Edited by TheNewWorldMan on 03-30-2007 11:03 AM
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in a credit-scoring postnuclear Stone Age...