topic Re: High balances on revolving accounts in General Credit Topics

High balances on revolving accounts

CreditBob — Sun, 29 Jun 2008 16:06:10 GMT

This topic is very important so please pay attention. Creditors are lowering your line of credit on a major credit card because of two reasons. One is that the default on monthly payments is increasing. The second one is individuals that continue to have high balances.

Let's say you have a $ 5,000.00 line of credit on a visa and keep a high balance at least 90% or even maxed out to the limit, you are a riskier customer to that creditor. So what is happening is now the line of credit is lowered to for example $ 2,000.00 The problem is not only have you maxed out but are now over the limit which will have a negative impact on your fico score. This will impact the score until the high balance falls off your credit report which may only happen seven years after you pay the balance below the credit line of $ 2,000.00 The only other way to recover from this faster would be if the creditor raised the line of credit on the account past what the high balance is being reported.

This is something very important ot think about. That s why you need to keep your balances below 50% utilization. Even better below 10% or even paid in full. Not all financial institutions will do this. The one's that will not will not approve you for new credit until you can show a few months of having a ,ow balance on any account.

Re: High balances on revolving accounts

MidnightVoice — Sun, 29 Jun 2008 17:16:59 GMT

There are many, many threads on this subject! Plus quite a few news links in this and the news forum!

Re: High balances on revolving accounts

marty56 — Sun, 29 Jun 2008 18:52:38 GMT

I would also add to keep this in mind if you do a BT.

Re: High balances on revolving accounts

tcham54687 — Mon, 30 Jun 2008 04:06:21 GMT

My experience over the last 3 months has been very different. I went over the limit on my 2 credit cards with NFCU and my USAA credit card. The CL on each of them was automatically raised above my high balance, I didn't request it. Of course shortly after that happened I found this forum and will never get that high on my balances again. Granted, I've had those cards for close to 20 years, so that was probably some goodwill being displayed. I'm sure this was more the exception than the norm.

Re: High balances on revolving accounts

Anonymous — Mon, 30 Jun 2008 17:34:32 GMT

@CreditBob wrote:
The problem is not only have you maxed out but are now over the limit which will have a negative impact on your fico score. This will impact the score until the high balance falls off your credit report which may only happen seven years after you pay the balance below the credit line of $ 2,000.00

Are you talking about high credit limit being recorded more than new credit line or an actual over the limit comment? Can they tag you with over limit comment if they lowered your credit limit below your current balance? That's kinda like really shady and sounds illegal for them to mark your account with a negative remark. I am not sure I understand this. But I have had banks take away my high credit limits reducing them down to nothing while my high credit limits are 10 times over my current credit limit and this has had no affect on my credit score "after I brought down the balance" below the new credit limit. Once paid score rebounded back to normal. No 7 year wait. But they did not place an over the limit remark just that high credit is well above credit line. Please help me understand which one you are describing. Highlimit or actual over limit notation mark. Thanks.

Re: High balances on revolving accounts

smallfry — Mon, 30 Jun 2008 21:23:35 GMT

I've heard of banks walking down your credit limit as you pay off the balance but never have I heard of a bank lowering your limit under what you currently owe them. Kinda doubt it but who knows?

Re: High balances on revolving accounts

smallfry — Mon, 30 Jun 2008 21:24:33 GMT

@tcham54687 wrote:
My experience over the last 3 months has been very different. I went over the limit on my 2 credit cards with NFCU and my USAA credit card. The CL on each of them was automatically raised above my high balance, I didn't request it. Of course shortly after that happened I found this forum and will never get that high on my balances again. Granted, I've had those cards for close to 20 years, so that was probably some goodwill being displayed. I'm sure this was more the exception than the norm.

Those credit unions are the exception and not the norm. Kinda doubt Citi or Chase would up your limit if you went over.