topic Re: High utilization cld ? in Credit Cards

High utilization cld ?

avggoal700 — Mon, 08 Aug 2016 13:26:28 GMT

I know each person is different but is there a general % where creditors might start to cld you? Overall and individual .

I know the lower the better of course and all my revolving is on auto pay, never have missed a revolving payment.

Re: High utilization cld ?

Pway — Mon, 08 Aug 2016 16:31:31 GMT

We never know when a creditor may CLD a person. I have seen it happen to people with excellent credit and people with shaky credit. Barclays is one of those lenders that will CLD you for too many inquiries, new accounts and etc.

A CLD also happens when there are significant amount of money owed on each credit card they own or when one is making only the minimum payments. It is really hard to tell when or how a creditor will CLD a person. Each and every profile is different that is why it is important to keep balances low.

Re: High utilization cld ?

Thomas_Thumb — Mon, 08 Aug 2016 18:53:41 GMT

@Pway wrote:
We never know when a creditor may CLD a person. I have seen it happen to people with excellent credit and people with shaky credit. Barclays is one of those lenders that will CLD you for too many inquiries, new accounts and etc.

A CLD also happens when there are significant amount of money owed on each credit card they own or when one is making only the minimum payments. It is really hard to tell when or how a creditor will CLD a person. Each and every profile is different that is why it is important to keep balances low.

Generally a CLD won't be a consideration unless high balances are maintained month after month - indicative of a chronic problem ... or in my case non use of a credit card for a year indicating there is no profit potential for the account. Fortunately all I experienced was a "wake up call" CLD as opposed to an account closure notification which some people get.

Re: High utilization cld ?

12njoy — Mon, 08 Aug 2016 23:06:09 GMT

I got a CLD from Barclays and Chase for too many new accounts. Utilization was bare bones, income high, and no derogs. I ended up closing Barclays as a result but let Chase accounts open. Looking back on it, I think that I had multiple cards which had small balances as I was trying to make sure that I utilized all my accounts. I think this also may have played a factor even though I'm talking about small balances like $50. Really each case is different. There won't be one model that fits every case.

Re: High utilization cld ?

Anonymous — Mon, 08 Aug 2016 23:21:08 GMT

@12njoy wrote:
I got a CLD from Barclays and Chase for too many new accounts. Utilization was bare bones, income high, and no derogs. I ended up closing Barclays as a result but let Chase accounts open. Looking back on it, I think that I had multiple cards which had small balances as I was trying to make sure that I utilized all my accounts. I think this also may have played a factor even though I'm talking about small balances like $50. Really each case is different. There won't be one model that fits every case.

Oh wow....

Re: High utilization cld ?

CreditMagic7 — Mon, 08 Aug 2016 23:37:32 GMT

Some people play with fire on the percentages and although with certain lenders like Discover, running up the ladder well over 50% then PIF might actually produce a dividend in a higher limit and/or earlier CLI than expected, i leave matters like this to others to play with.

To me it's not worth the risk especially when with some lenders it takes a great deal of time and effort just to build up your low or mid range starting limits to a point that is more acceptable for you.

Re: High utilization cld ?

Anonymous — Tue, 09 Aug 2016 08:17:19 GMT

This is such a wildcard
It's all speculation because CLD could stem from internal issues at the CCC that have little to do with the actual behavior of any one card holder

Could be the bank not liking profits
Could be their cost went up
The market tightened
They made soft investments elsewhere

Any number of things not even related to you

Too much of a crap shoot to think we have that much control over if they decide to 'limit' possible liabilities

We saw this overall in 08/09
They were slashing CLs just in case, card holders hadn't done anything wrong

But the state of THEIR businesses caused them to react and that can happen with any vendor Tomorrow, so it is what it is.

Do the best we can and don't be married to only one vendor.... like I always say, best to have a few places to lay your head, just in case😉

Re: High utilization cld ?

Anonymous — Tue, 09 Aug 2016 09:48:56 GMT

Risk Management. That's it. Every lender has it's own measuring stick. When someone doesn't measure up, they get whacked; how hard depends on the level of elevated risk.

No lender will take adverse action without cause. We may not agree with the cause or the action, but for lenders its all about managing their own risk.

Re: High utilization cld ?

BeeH11 — Tue, 09 Aug 2016 10:49:38 GMT

Things may be different now but when I was in college (mid 2000's) all my cards I had at the time were maxed out for months at a time and I never got a CLD. However, I would usually pay them down 1-2 times a year (when financial aide/student loans kicked in). Not sure if that made a difference. I always paid on time (usually the minimum). But Citi bank did close my student credit card shortly after the housing bubble pop (I was so mad).

Re: High utilization cld ?

creativeZero7 — Tue, 09 Aug 2016 11:55:28 GMT

Each lender has their own formula. I've had high utilization on a couple cards but I've never heard anything from the bank. I personally think it's about the risk formula at each institution, and that is always fluid-changing. A customer with high uti but that pays down and spends month to month may be a great customer at one bank (the bank earns interest each month and spending is consistent). While at another bank that same customer may be viewed as a high risk and not worth the interest income. It also has a lot to do with so many factors outside of our control. Think back to the recession when banks were overexposed and across the board people were cld, closed, etc.

Re: High utilization cld ?

takeshi74 — Tue, 09 Aug 2016 12:37:33 GMT

@avggoal700 wrote:
I know each person is different but is there a general % where creditors might start to cld you?

It's never just about one factor. One's enstire credit profile always matters. A person with a thick credit profile in otherwise good standing is going to be less likely to see AA from high Revolving Utilization than another with issues such as a thin profile, lates, other derogs, low AAoA, a number of new accounts and credit seeking activity, etc. The stronger profile will generally be able to handle higher Revolving Utilization than the weaker profile.

Additionally, creditors are not all identical and have different risk tolerances so you cannot rely on X% for all creditors. It's certainly possible for just one creditor to take AA. It's possible for some but not all to take AA. It's possible for all to take AA. It really all depends on the specifics.

Instead of trying to walk the line, get your profile as clean and as strong as possible and keep your Revolving Utilization low. If you have issues then get to work on them. Hit the Rebuilding subforum and see what you can do about them.

@Anonymous wrote:
This is such a wildcard

There are unknown variables at play but it's all about risk assessment and the typcial risk factors are known. It's not just random or a wildcard. Those that get CLD'd or other AA always have one or more reasons whether or not they happen to recognize them. Again, I'm not saying that you'll know exactly where each creditor draws the line but if you know the standard factors and understand what presents risk to creditors and work on minimizing risk then you can easily stay in good shape. It just requires the time and effort to understand these things versus attempting to rely on quick fixes and assuming simple causal relationships like "X% leads to AA".

@Anonymous wrote:
Could be the bank not liking profits
Could be their cost went up
The market tightened
They made soft investments elsewhere

These can certainly change risk tolerances for creditors but they're not common concerns. The standard factors are always important concerns to creditors.

@avggoal700 wrote:
I know the lower the better of course and all my revolving is on auto pay, never have missed a revolving payment.

Whiel that's great you're overlooking a lot of other considerations. From a FICO scoring perspective:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

Re: High utilization cld ?

smittyboy020 — Wed, 10 Aug 2016 04:37:27 GMT

My BOA card was hit with a cld an hour ago because of high utilization. I paid down the card to zero last week, and it was nuked today...From $7500 to $1600. My utilization overal was at 89%, but I paid everthing down to 20% percent. A little too late. I sat in high itilization for about a year because of financial issues. Sucks...

Re: High utilization cld ?

UncleB — Wed, 10 Aug 2016 07:47:30 GMT

Like has already been said, there are many variables at play, really too many to make general blanket statements.

With that caveat firmly in place, I'll say that in my own case if I had to carry a significant balance (> 60%) I would try to stick with Capital One, since historically they aren't known for taking AA as long as you make your payment.

'Back in the day' I used to carry significant balances for months/years at a time with Citi as well, also with no AA (I know, a terrible idea - I was young and foolish then) but I don't know if I would have the same experience if I were to repeat this. I am carrying a $2300 balance on my Diamond Preferred (0% APR for 21 months) but since the card is pretty much designed for this I'm not too concerned. (I'm also making more than double the minimum payments.)

More recently, I used my new Discover last year for a 0% BT and it was > 50% for several months... not only was there no problem, I even got two CLIs while I was carrying the balance. They were both small ($500) but it was a nice gesture. However once I had the balance PIF they gave me a $4k CLI, so having the balance paid off clearly made a difference (at least in this instance).

With my other cards I tend to be more conservative. If I had any of the historically 'jumpy' lenders such as Barclays I would be especially careful with them, but so far the lenders I have seem to be fairly solid.

Note that I'm not advocating for anybody to follow my lead; I'm simply sharing my own experiences. While I always try to avoid 'risky' behavior, I tend to value saving money with 0% offers over keeping an issuer happy... meaning my tolerance for risk might be different from other people. As always your (and my) experience is YMMV.

Re: High utilization cld ?

Anonymous — Wed, 10 Aug 2016 08:57:11 GMT

Honestly, it depends on your credit profile, your tolerance for risk, creditor, and your goals. I've allowed my Simplicity to report with a utilization of 98% and there was no AA from Citi. I didn't rush to pay it down. I made weekly payments which were about 2-3X the minimum payment every month.