topic Re: Chase CLI!!! in Credit Cards

Chase CLI!!!

kal9988 — Wed, 06 Jul 2011 01:12:23 GMT

Chase raised my CLI by $4,000 by themselves! Did not have to request it. I moved and had a lot of expenses the first few months and kept getting close to the limit before each billing cycle ended, which is why I assume they did it. However, because this is one of their cards that does not report credit limits to the bureaus, I'm going to have to charge it up to the limit (I'm thinking buying a $5k camera or something similar and then returning it a week later). Then I'll pay the whole thing off and hopefully see my score go up.

Don't think this is extreme -- my typical monthly expenses are 20% of my revolving credit limit. Even though I pay it off in full every month, the balance is reported which hurts my score. By charging up the card, it will report my credit limit as the highest balance, and as such my debt to limit ratio will be a little better. Thoughts?

Re: Chase CLI!!!

slarano — Wed, 06 Jul 2011 02:32:01 GMT

So let me understand this right. When we have cards that do not report its credit limit, the highest balance that has been reported on the card is considered as its credit limit? Does that hold true when factoring utilization? I always thought that neither or these things were the case.

Re: Chase CLI!!!

Anonymous — Wed, 06 Jul 2011 07:48:26 GMT

@simonlarano wrote:
So let me understand this right. When we have cards that do not report its credit limit, the highest balance that has been reported on the card is considered as its credit limit? Does that hold true when factoring utilization? I always thought that neither or these things were the case.

No ... It shows as Highest Balance.

No ... It does not included in my case.

Re: Chase CLI!!!

slarano — Wed, 06 Jul 2011 07:53:26 GMT

Ok, thanks for clarifying. That's what I always thought as well, but OP's post seems to suggest otherwise.

Re: Chase CLI!!!

kal9988 — Wed, 06 Jul 2011 13:53:31 GMT

bunnyrabbit are you sure? If you search through the forums, there are many posts that say that for chase cards that don't report the credit limit, the highest balance is used by FICO.

Re: Chase CLI!!!

Alcibiades — Wed, 06 Jul 2011 14:41:27 GMT

@kal9988 wrote:
bunnyrabbit are you sure? If you search through the forums, there are many posts that say that for chase cards that don't report the credit limit, the highest balance is used by FICO.

I just checked, Chase reports my credit limit, not highest balance.

I think the only cards that report highest balance are

1) Charge cards like Amex

2) Certain "Visa Signature" or "World Mastercard" cards

Re: Chase CLI!!!

kal9988 — Wed, 06 Jul 2011 14:47:23 GMT

Yes I have a Chase World Mastecard (it's the Onepass Plus). Isn't the highest balance used by FICO to calculate the util ratio?

Re: Chase CLI!!!

Alcibiades — Wed, 06 Jul 2011 14:49:31 GMT

@kal9988 wrote:
Yes I have a Chase World Mastecard (it's the Onepass Plus). Isn't the highest balance used by FICO to calculate the util ratio?

Then most likely yes, it is the highest reported balance.

Re: Chase CLI!!!

kal9988 — Wed, 06 Jul 2011 15:25:10 GMT

I thought so too, not sure why bunnyrabbit is saying the opposite. Yes, is is listed on reports as the highest balance, but FICO uses it as the credit limit when calculating the score.

Re: Chase CLI!!!

Anonymous — Wed, 06 Jul 2011 15:33:49 GMT

@kal9988 wrote:
I thought so too, not sure why bunnyrabbit is saying the opposite. Yes, is is listed on reports as the highest balance, but FICO uses it as the credit limit when calculating the score.

Hey Guys,

I thought you might be interested in this. From an interview with a FICO spokesman:

Because charge cards typically don't have preset spending limits, the FICO scoring model previously considered the highest balance on those cards. "In the old days, our scoring model had an option in which, under certain circumstances, it could substitute highest balance on record for a missing limit on a charge card," Watts says. For example, if you charged $5,000 on a card one month and your balance never exceeded that amount, the model would consider $5,000 to be your credit limit. FICO says that approach hasn't been used in its general scoring models during the last 10 years, however.

The full article is here: http://www.creditcards.com/credit-card-news/jeremy-simon-credit-score-charge-card-amex-1508.php

I was curious about it and a little skeptical, but this is straight from the source.

Re: Chase CLI!!!

kal9988 — Wed, 06 Jul 2011 15:36:14 GMT

That article is about charge cards, "which you must pay in full each month" -- not credit cards, which can have balances carry over.

What’s the difference between a charge card and a credit card?:

http://articles.boston.com/2010-01-23/business/29319635_1_card-credit-spending-limits

Re: Chase CLI!!!

Lel — Wed, 06 Jul 2011 17:40:02 GMT

@simonlarano wrote:
So let me understand this right. When we have cards that do not report its credit limit, the highest balance that has been reported on the card is considered as its credit limit? Does that hold true when factoring utilization? I always thought that neither or these things were the case.

The answer to this is kind of complicated. This myFICO blog post might help make things a little clearer:

Is there no limit to the confusion surrounding NPSL [no preset spending limit] cards?

Here's my understanding of how utilization is calculated for these types of cards. ETA: For the TU04 score, the Equifax pathway would be followed (since TU04 is a newer version of FICO like Equifax's Beacon 5.0). For the most widely used Experian score, v2, the TU98 pathway would be followed.

Re: Chase CLI!!!

kal9988 — Wed, 06 Jul 2011 17:28:07 GMT

Thanks Lel! Very helpful. Based on that, it seems that I should charge up the card one month to the credit limit so that I can have the highest possible "highest balance," then pay it off, to help with my future utilization ratio.

Re: Chase CLI!!!

Anonymous — Wed, 06 Jul 2011 17:31:01 GMT

@kal9988 wrote:
Thanks Lel! Very helpful. Based on that, it seems that I should charge up the card one month to the credit limit so that I can have the highest possible "highest balance," then pay it off, to help with my future utilization ratio.

I'd be more than happy to join you in a shopping excursion in any sunny locale.

Re: Chase CLI!!!

kal9988 — Wed, 06 Jul 2011 17:33:59 GMT

LOL I was thinking something expensive that I could return the next week

Re: Chase CLI!!!

minimock — Wed, 06 Jul 2011 19:03:36 GMT

Or you could BT everything to one card, course that would cost you something. Might be worth it on a one time basis.

Re: Chase CLI!!!

slarano — Wed, 06 Jul 2011 22:19:01 GMT

Thanks for all the posts and replies regarding this topic, everyone! Why not just make it simple and report all card CL's, regardless of whether it's a Signature card, etc. Is there a benefit for us or the ccc to not report the CL?

Re: Chase CLI!!!

kal9988 — Wed, 06 Jul 2011 23:02:20 GMT

I email FICO this question, and their response is in line with my original thoughts:

"Thank you for contacting us. The FICO scoring formula scans the credit report for important data such as account status, balance, and credit limit. If a credit limit is not reported, then the formula can view the largest past balance as the credit limit. With credit cards that do not report or have a credit limit it is a good idea to have the balance on your current statement much lower than the balance on your last statement. Still, credit utilization considers the average amongst all of your revolving accounts. Please let us know if you have additional questions, and thank you for choosing myFICO."

Re: Chase CLI!!!

Lel — Thu, 07 Jul 2011 17:02:35 GMT

@kal9988 wrote:
I email FICO this question, and their response is in line with my original thoughts:

"Thank you for contacting us. The FICO scoring formula scans the credit report for important data such as account status, balance, and credit limit. If a credit limit is not reported, then the formula can view the largest past balance as the credit limit. With credit cards that do not report or have a credit limit it is a good idea to have the balance on your current statement much lower than the balance on your last statement. Still, credit utilization considers the average amongst all of your revolving accounts. Please let us know if you have additional questions, and thank you for choosing myFICO."

Barry's blog post that I referenced above is more detailed and accurate than this response. The response that you received does not make a distinction between the way TU98 and EQ factors in these accounts.

Is your Chase card described as "revolving" or "open"?

Both my Chase cards are NPSL cards and do not report the credit limits. They do report the high balances. Both of them are classified as "open" accounts. For TU98, my past high balances are factored into utilization. For EQ, these cards are completely excluded from utilization. During the holidays, I ran up a pretty high balance on one of my Chase cards. My TU score suffered because utilization went up, but my EQ score didn't budge because it didn't "see" these cards when it calculated my utilization.