topic Re: Is there a cap on net credit limits for utilization purposes?? in Understanding FICO® Scoring

Is there a cap on net credit limits for utilization purposes??

Anonymous — Sun, 29 Mar 2009 13:07:58 GMT

I just got a Scorepower report and noted that my utilization was cited at 5%. However, with the balance quoted, it should have been only 2.5%. Obviously, FICO did not total up all of my credit limits. Is there a ceiling on any given credit card at which FICO does not consider the total credit limit available??? For example, if you have a $60K limit, is it fully factored into your scoring??

Thanks,

Re: Is there a cap on net credit limits for utilization purposes??

haulingthescoreup — Sun, 29 Mar 2009 16:28:49 GMT

No, CC's (and lines of credit) with CL's of somewhere around $30K or more are not factored in. Also, some cards, generally Visa Signature and Mastercard World cards, don't report a credit limit. They report your highest balance instead, which can really mess things up.

Re: Is there a cap on net credit limits for utilization purposes??

MattH — Sun, 29 Mar 2009 17:26:48 GMT

@haulingthescoreup wrote:
No, CC's (and lines of credit) with CL's of somewhere around $30K or more are not factored in. Also, some cards, generally Visa Signature and Mastercard World cards, don't report a credit limit. They report your highest balance instead, which can really mess things up.

Traditional AMEX charge cards (Green, Gold, and Platinum) have no preset limit and therefore only report the high balance. If %utilization were an issue for me, I might fix this by putting all my spending for a single month (at least, all I spend with merchants who take AMEX) on my AMEX in order to bump up the high balance.

Re: Is there a cap on net credit limits for utilization purposes??

haulingthescoreup — Sun, 29 Mar 2009 17:55:12 GMT

The only problem with this strategy for AmEx charge cards is that, unlike other CC's, AmEx reports the highest balance that was ever posted on a statement. Other cards report the highest balance at any point in a billing cycle, even when the statement balance was $0, so this strategy would work if needed.

So if you were to load up an AmEx card to establish a highest-ever balance, you'd have to let it show as a balance on your reports, which might backfire with other lenders. Not to mention that it would take two months for the balance to display $0 again.

Really, they can be the most maddening CCC...

Re: Is there a cap on net credit limits for utilization purposes??

MattH — Sun, 29 Mar 2009 19:29:30 GMT

@haulingthescoreup wrote:
The only problem with this strategy for AmEx charge cards is that, unlike other CC's, AmEx reports the highest balance that was ever posted on a statement. Other cards report the highest balance at any point in a billing cycle, even when the statement balance was $0, so this strategy would work if needed.

So if you were to load up an AmEx card to establish a highest-ever balance, you'd have to let it show as a balance on your reports, which might backfire with other lenders. Not to mention that it would take two months for the balance to display $0 again.

Really, they can be the most maddening CCC...

Annoying indeed, if they were not my oldest tradeline (since 1982) I might consider closing my account with them. Once upon a time -- back when they were considered extremely hard to get -- their customer service was truly superlative, especially for international travel. Before ATM networks went international, I cashed many a check at AMEX offices outside the USA. Now their service isn't what it used to be, and there are other ways to get cash abroad, and also I do far less international travel than I did two decades ago (ironically enough, now that I've got the money to stay in much nicer places than I did in the 1980s, I just don't have the time!). So for me now AMEX is mostly a credential that I want to keep so I give them a certain amount of transactions every month and pay in full upon receipt of the statement. But if AMEX had not raised my APR recently they would get much more transaction business from me: while the APR is for me only of symbolic value since I don't pay interest on CCs, I still want to reward Chase for keeping my APR below 6% and punish AMEX for ratejacking a customer who has been problem-free for decades.

Re: Is there a cap on net credit limits for utilization purposes??

Anonymous — Sun, 29 Mar 2009 19:57:52 GMT

@haulingthescoreup wrote:
No, CC's (and lines of credit) with CL's of somewhere around $30K or more are not factored in.

Thanks for the prompt replies. So if someone had a basic VISA with an $80K CL, only the first $30K would go towards overall utilization???

I avoid holding cards which don't report a CL. I love AMEX but would never pay a dime for use of their charge cards. Blue Cash is my "go to" card, both domestically and abroad. I realized about 2.4% cashback return with it last year.

Re: Is there a cap on net credit limits for utilization purposes??

Anonymous — Sun, 29 Mar 2009 20:47:02 GMT

Hey, Lust, slumming at MyFico, eh?

It should be all or nothing - the 80K CL account should be completely ignored for utilization and the account would have a very minor influence on your score. I'm not sure if CCs get formally reclassified - I know that TU will classify a high-limit HELOC as "other".

From anecdotal evidence, my personal estimate is that TU's revolving account cutoff is about 40K and EQ/EX's cutoff is about 60K ...

Message Edited by Revike on 03-29-2009 01:47 PM

Re: Is there a cap on net credit limits for utilization purposes??

smallfry — Sun, 29 Mar 2009 20:51:11 GMT

@Anonymous wrote:
Hey, Lust, slumming at MyFico, eh?

It should be all or nothing - the 80K CL account should be completely ignored for utilization and the account would have a very minor influence on your score. I'm not sure if CCs get formally reclassified - I know that TU will classify a high-limit HELOC as "other".

From anecdotal evidence, my personal estimate is that TU's revolving account cutoff is about 40K and EQ/EX's cutoff is about 60K ...
Message Edited by Revike on 03-29-2009 01:47 PM

Ike TU ain't 40K it's 30K from my own experience.

Re: Is there a cap on net credit limits for utilization purposes??

Anonymous — Sun, 29 Mar 2009 21:36:51 GMT

@Anonymous wrote:

From anecdotal evidence, my personal estimate is tha EQ/EX's cutoff is about 60K ...

Thanks. $60K seems high to me. In the instance which I cited above where myFICO mistakenly placed me at 5% utilization, I got nowhere near $60K in credit for a couple of my accounts with high CLs.

Re: Is there a cap on net credit limits for utilization purposes??

Anonymous — Sun, 29 Mar 2009 22:07:37 GMT

Perhaps there are two different cutoffs for CCs and HELOCs? All I know is that my 56K CL HELOC is counted as a revolving account on both EX and EQ and factored into the reported utilization, and the 31K and 35K CCs are reported identically on all three credit reports, with no indication from the TU Fico score that TU's formula is ignoring that combined 66K CL.

I'm going to pull EQ and TU Fico scores in a couple of days, and I'll try to dig up some old reports and scores to see if I can find any more clues. Maybe I've missed something ...

Smallfry, where were you seeing the indications that 30K is the TU cutoff?

Re: Is there a cap on net credit limits for utilization purposes??

haulingthescoreup — Sun, 29 Mar 2009 23:22:44 GMT

Revike wrote:

Perhaps there are two different cutoffs for CCs and HELOCs? All I know is that my 56K CL HELOC is counted as a revolving account on both EX and EQ and factored into the reported utilization, and the 31K and 35K CCs are reported identically on all three credit reports, with no indication from the TU Fico score that TU's formula is ignoring that combined 66K CL....

*tears up another set of notes on things I thought I knew*

Really, this will just make you nuts. I know my $50K HELOC is not factored, and I've seen so many posts indicating that $30K or $40K is the magic number for CC's as well. Just when you think that you've figured something out...

So it's listed as revolving (which of course, it is), and you can tell from varying utils on your reports that the $56K is included in the denominator when your util is calculated?

Re: Is there a cap on net credit limits for utilization purposes??

smallfry — Mon, 30 Mar 2009 00:14:38 GMT

@Anonymous wrote:
Perhaps there are two different cutoffs for CCs and HELOCs? All I know is that my 56K CL HELOC is counted as a revolving account on both EX and EQ and factored into the reported utilization, and the 31K and 35K CCs are reported identically on all three credit reports, with no indication from the TU Fico score that TU's formula is ignoring that combined 66K CL.

I'm going to pull EQ and TU Fico scores in a couple of days, and I'll try to dig up some old reports and scores to see if I can find any more clues. Maybe I've missed something ...

Smallfry, where were you seeing the indications that 30K is the TU cutoff?

I allowed my NFCU 40K to report. It was the only CC reporting on that TU FICO report. TU dinged me for 11 points for no revolving lines reporting. I chopped my credit limit down to 29K on the NFCU card repeated the same action and the card was picked up as being used by TU. Some others have reported the same.

Re: Is there a cap on net credit limits for utilization purposes??

smallfry — Mon, 30 Mar 2009 00:16:24 GMT

The Dollars reported on Credit at a Glance but I was dinged for no usage. Makes sense? No of course not but hey it's FICO.

Message Edited by smallfry on 03-29-2009 08:16 PM

Re: Is there a cap on net credit limits for utilization purposes??

Anonymous — Mon, 30 Mar 2009 01:27:30 GMT

@smallfry wrote:
The Dollars reported on Credit at a Glance but I was dinged for no usage. Makes sense? No of course not but hey it's FICO.
Message Edited by smallfry on 03-29-2009 08:16 PM

No, that makes sense.

Based on your NFCU test, is there any reason TU's maximum CL couldn't be $35,000 or $39,999? Either of those cutoff amounts would fit your NFCU examples as well as my 31K and 35K accounts ...

Re: Is there a cap on net credit limits for utilization purposes??

Anonymous — Mon, 30 Mar 2009 04:27:16 GMT

If I'm following this thread correctly, someone with $120,000 in total credit limits would be much better off( in terms of utilization calculation) by having 4 cards with limits of $30,000 each vs 2 cards with limits of $60,000 each. Right?

Re: Is there a cap on net credit limits for utilization purposes??

smallfry — Mon, 30 Mar 2009 10:00:35 GMT

@Anonymous wrote:
If I'm following this thread correctly, someone with $120,000 in total credit limits would be much better off( in terms of utilization calculation) by having 4 cards with limits of $30,000 each vs 2 cards with limits of $60,000 each. Right?

I think they would and better yet if it were spread among 4 different banks.

Message Edited by smallfry on 03-30-2009 06:00 AM

Re: Is there a cap on net credit limits for utilization purposes??

hdporter — Tue, 30 Jun 2009 13:03:42 GMT

Some additional data points:

$17K bal on $50K card. Ignored by TU/EQ in Utilization stat.

$12K bal on $36K card. Ignored by TU; Factored by EQ in Utilization stat.

"Raw" utilization = 11%. EQ myFICO reports as 7%. TU myFICO reports as 2%.

------------------

Re HELOC (DW report):

Apply in 2003 for HELOC line increase. Reporting $24K bal against $50K line. 63 pt difference between lender FICO and myFICO. (DW app: 666 vs 729). Apply again in 2004. HELOC bal $25K. Lender 724 vs myFICO 716.

Merely inference, but on first round it would seem that the lender FICO score factored the HELOC balance as a revolving account; treated it as a mortgage account the 2nd time around.