topic Re: Credit limits lowered!!! in General Credit Topics

Credit limits lowered!!!

Anonymous — Wed, 13 Jun 2007 17:23:40 GMT

Newbie here. We got into some serious credit card debt (maxed out cards with fairly high credit limits) and as soon as we refinanced and paid them all off, Chase and B of A dropped the limits significantly. We were trying to help our credit scores, but I am afraid we hurt them. The refinance we did was an adjustable at a very high rate just to clean up the credit cards. The broker referred to is as a band-aid loan and told us that once we did that, our credit scores would jump and we could refinance at a fixed rate in around 6 months. The only positive is that we have never had a mortgage late. How significantly will the drops in credit limits affect our credit scores?

Re: Credit limits lowered!!!

Tuscani — Wed, 13 Jun 2007 17:25:25 GMT

The lower limits reduce your overall avail credit which impacts your util. Try and get the limits restored.

Re: Credit limits lowered!!!

Anonymous — Wed, 13 Jun 2007 17:44:36 GMT

How would I do that?

Re: Credit limits lowered!!!

sl — Wed, 13 Jun 2007 17:57:48 GMT

Call the credit card companies and ask them to reinstate the old limits.

Re: Credit limits lowered!!!

Anonymous — Wed, 13 Jun 2007 18:21:39 GMT

I am sorry to ask so many questions, but is it really that simple? Is it that they are lowered automatically in certain cases and a person can change that, or what?

Re: Credit limits lowered!!!

Tuscani — Wed, 13 Jun 2007 18:22:51 GMT

JemiBlue wrote:

I am sorry to ask so many questions, but is it really that simple? Is it that they are lowered automatically in certain cases and a person can change that, or what?

Never hurts to ask.

Re: Credit limits lowered!!!

Anonymous — Wed, 13 Jun 2007 18:47:49 GMT

@Anonymous wrote:
I am sorry to ask so many questions, but is it really that simple? Is it that they are lowered automatically in certain cases and a person can change that, or what?

With Bank of America that is correct. As soon as you pay it off your account automatically is sent to the credit dept to be reduced down to almost nothing. All you have to do is call and ask them to put it back before 90 days. I ask for a credit line increase every time this happens. lol. Its annoying. Ask them to note your account to prevent this in the future.

Re: Credit limits lowered!!!

MM1234 — Wed, 13 Jun 2007 19:20:07 GMT

For me when they lowered them it was not possible to call back and get it back until i showed like 6 months of good payments PLUS carrying a small balance for a while. I really dont think calling so soon will help but you can ask.....or at least ask what will it take to get your limit back.

The best way is to somehow pay down as much as you can on all your cards. Then in a few months call them back and see if they will re-raise it.

Re: Credit limits lowered!!!

Anonymous — Wed, 13 Jun 2007 19:35:49 GMT

JemiBlue wrote:
I am sorry to ask so many questions, but is it really that simple? Is it that they are lowered automatically in certain cases and a person can change that, or what?

It can be that simple. A lot of things happen at CCCs on autopilot. Instant approvals for CCs online at 2AM don't happen because a guy in Bangalore working the service center is furiously typing and reviewing your credit. I daresay that at least some APR increases and CL reductions occur on autopilot.

By calling, or writing, you get a human being eyeballing your information. That human being, particularly if you're pleasant on the phone or in print, is going to be more inclined to help.

A little subtle psychology never hurt. People have an inherent desire to wanna help others. Makes them feel important and empowered. You can tap into that by asking when you call, "Hi, can you help me?" It can make you appear non-threatening. A person lets down their guard and they are more inclined to acquiesce to your request.

I would first call. If they say no, remain calm and polite, and remember to thank them. "OK, wells thanks. I do appreciate you taking the time." Helps keep your mind in the right state as well.

Then write a recon letter.

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&message.id=3183

If they still say no, don't despair. Are your CCs paid in full, or at least very low balances? Keep your reported CC util between 1 and 9 percent. CCCs usually report your balances at the close of the statement cycle, when they tack on finance charges and send you the bill. My advice is to pay the bill electronically online maybe 5-7 days before the statement closes. Pay it down to 5 percent util so when the finance charges are added it will bump up to maybe 6 percent util. The numbers don't matter so long as they are between 1 and 9. If you aim for 5, it's dead center between 1 and 9.

Do this each month, and in a couple months ask again.

Re: Credit limits lowered!!!

Anonymous — Wed, 13 Jun 2007 19:40:24 GMT

Well, we paid off all the balances. It went from a very large credit line to a very small one. I guess the best thing to do is to call and see what they will do. I thought paying off the balances would be helpful, but when they lower the credit limits so significantly, I am wondering if there was really any benefit to what we did. Rather exasperating, actually. Thanks for all the input. You folks are great!!

Re: Credit limits lowered!!!

Anonymous — Wed, 13 Jun 2007 20:09:12 GMT

Well, I called B of A and they are not budging. We had a 30 day late with them while we were in the process of refinancing our house to pay everything off (stupid of us-but the interest rate went up so much and the payments became too much) as well as a couple other 30 day lates. They weren't even especially nice, but I guess they are in charge. Not sure what to do at this point except to use all credit sparingly and pay off balances on time. Lesson learned, I guess. I am just wondering how significantly this will affect our credit scores. I'm not even going to call Chase - too gun shy now.

Re: Credit limits lowered!!!

Anonymous — Wed, 13 Jun 2007 20:11:02 GMT

It doesn't hurt to ask in this case. Bank of America told me it was an "automatic trigger". After "specific behaver" they do this to prevent you from racking up new debt that you may not be able to pay next time. They said, We don't know and reduce the limits to be on the safe side these days. They put it back with out a minute delay. They wanted to be reassured things were ok and needed to know why I took so long to pay back. I simply said because I felt like keeping some spare cash on hand.

Re: Credit limits lowered!!!

Anonymous — Wed, 13 Jun 2007 20:18:43 GMT

@Anonymous wrote:
We had a 30 day late with them

Just 30 day lateness? Is the rest of your CR clean of negs? If so, ask them to remove the lateness. Often they will do that if you have never had it happen before. If you said you had money problems, they won't give you back your CL. And they probably won't fix your APR just yet. But you might ask for a manager, and ask them to look at your credit history with them, if no latenesses, ask them to remove if from your credit report. If denied, call back, ask again. Then a GW letter. In 3-6 months ask for your credit line to be raised back.

As far as UTL loss. It's not that big of a deal. You can still keep your UTL low but supplementing a Check debit card, rather than putting things on your credit cards. It is frustrating. Been there. I have been late in the past. I called the banks before I was late and said I could not pay, please allow me to skip a month or two. I've been lucky, they let me. This way I head off a neg before it happens. It never hurts to ask permission.

Re: Credit limits lowered!!!

Anonymous — Wed, 13 Jun 2007 21:34:49 GMT

JemiBlue wrote:
Well, I called B of A and they are not budging. We had a 30 day late with them while we were in the process of refinancing our house to pay everything off (stupid of us-but the interest rate went up so much and the payments became too much) as well as a couple other 30 day lates. They weren't even especially nice, but I guess they are in charge. Not sure what to do at this point except to use all credit sparingly and pay off balances on time. Lesson learned, I guess. I am just wondering how significantly this will affect our credit scores. I'm not even going to call Chase - too gun shy now.

Follow up with a recon letter asking for a CLI and APR reduction. Some of primates who answer the phones have a brain size under 600cc. Don't give up. Remain polite, even if they are not. BOA has a nasty reputation for being, well, nasty.

IMHE, Chase is heaven sent. I have found them very easy to work with. Had 3 Chase accounts go late years ago, ran close to collections, I settled one and paid off the other two. They were never nasty with me. Recently got the TLs goodwilled away. Recently applied for a CC with them and was denied. I did a recon, and they seemed to imply they were gonna issue. Fraud Department contacted me to confirm info because of an FA. Very quick to answer, very nice, and very helpful.

Re: Credit limits lowered!!!

Anonymous — Thu, 14 Jun 2007 04:24:38 GMT

What even worse is to jack your rate up to %31 and drop your CL with every payment you send in and then close the account the minute it was paid off.
This happened with my DW. They even had the balls to charge an OL fee 1 week before the date on the letter informing of the CLD.

Re: Credit limits lowered!!!

Anonymous — Wed, 16 Jan 2008 13:20:54 GMT

Never been late with Washington mutual, I pay all my credit cards on time but I applied for a couple new cards during xmas and they lowered my limit. What's that all about? After reading some of your responses I guess it could be something automatic that lowered it. Anyways I was so upset I called and closed my account.........and when they asked me why, I told them. They just said ok well close it...... after cooling off I now realize I should of asked them to raise it back up. Any chance u guys think they'll open it back up? If anything I might have to many inquiries.

Re: Credit limits lowered!!!

Anonymous — Wed, 16 Jan 2008 13:24:25 GMT

Yeah- They will probably re-open it.

Also make sure they have your income updated-

knines wrote:

Never been late with Washington mutual, I pay all my credit cards on time but I applied for a couple new cards during xmas and they lowered my limit. What's that all about? After reading some of your responses I guess it could be something automatic that lowered it. Anyways I was so upset I called and closed my account.........and when they asked me why, I told them. They just said ok well close it...... after cooling off I now realize I should of asked them to raise it back up. Any chance u guys think they'll open it back up? If anything I might have to many inquiries.