topic Re: Credit Utilization? in General Credit Topics

Credit Utilization? - Another Question

JBoswell — Sat, 18 Apr 2009 13:17:06 GMT

I was told before on this site, by sidewinder I think, that credit limit and thus utl. isn't counted on closed accounts. I had been worried because my Chase CC was showing a limit of $100 when it should have been $22,000. But when I was checking my credit report on here it said that:

"Ratio of your revolving balances to your credit limits: 15056%"

The balance on that card was $15,056 at the time I got this report, so it seems as though it is being counted.

If it isn't being calculated on closed accounts, why is my ratio looking like that? is that how it appears to everyone? or just how it shows on MyFico? I'm just confused as to how that whole thing works with closed cards. My husband has two closed as well, if the debt to credit is still being taken into account we'd work at paying those down immediately, if not, we would focus on paying down other things and saving money twords the downpayment on our home. Unfortunately we don't have enough money to do both, so I want to be sure of what's being factored in before prioritizing where the money will go.

Thanks for any help!

Message Edited by JBoswell on 04-18-2009 09:17 AM

Re: Credit Utilization?

2wheel — Tue, 14 Apr 2009 12:42:37 GMT

is it a chase freedom card?? it might be that it is a signature card which is a charge card and not a credit card. mine did that for a while till I asked chase for a product change and then it reported correctly. I think this might be your problem call chase and ask them if its a signature card. If so switch it to a non-signature and when it reports again it will give you the credit limit

Re: Credit Utilization?

JBoswell — Tue, 14 Apr 2009 13:13:02 GMT

yea, I've already spoken to Chase several times, it's not a signature card. I was more or less just wondering about the credit utl. on closed cards and how that reports to the credit bureaus. The chase card itself is a whole other issue for another time

Re: Credit Utilization?

Anonymous — Tue, 14 Apr 2009 13:22:09 GMT

Ohhhhh, so the account is closed and you have a really high balance on it? Yes, that will greatly factor into the scoring. The problem now is say you have a $1000 limit and you had a $1000 charged on the card, you are already at 100% util on that card, when you close it you now have a $0 CL but you still have a $1000 balance charged on the card. That's really bad and will tank your score.

Re: Credit Utilization?

Anonymous — Tue, 14 Apr 2009 14:20:57 GMT

JBoswell wrote:
I was told before on this site, by sidewinder I think, that credit limit and thus utl. isn't counted on closed accounts. I had been worried because my Chase CC was showing a limit of $100 when it should have been $22,000. But when I was checking my credit report on here it said that:

"Ratio of your revolving balances to your credit limits: 15056%"

The balance on that card was $15,056 at the time I got this report, so it seems as though it is being counted.

If it isn't being calculated on closed accounts, why is my ratio looking like that? is that how it appears to everyone? or just how it shows on MyFico? I'm just confused as to how that whole thing works with closed cards. My husband has two closed as well, if the debt to credit is still being taken into account we'd work at paying those down immediately, if not, we would focus on paying down other things and saving money twords the downpayment on our home. Unfortunately we don't have enough money to do both, so I want to be sure of what's being factored in before prioritizing where the money will go.

Thanks for any help!
Message Edited by JBoswell on 04-14-2009 08:26 AM

Yes, I commented on closed accounts on this message. But, what I said was closed accounts with balances are calculated into your util....but the CL is not. This is my understanding, because on a closed account, you have no CL.

So, it really doesn't matter if your CL shows $100 or $100000.

This is my understanding.

Re: Credit Utilization?

Anonymous — Thu, 16 Apr 2009 01:18:44 GMT

Ok, I must make a correction.

I do some more researching and reading on the forums. The spouse has a CC that is closed with a balance(No longer), but they closed w/o notice and a balance was reported.

The CL is still counted........I did not think this was the case. And I apologize for giving incorrect information.

So, having the CL correct may actually help you.

Re: Credit Utilization?

JBoswell — Sat, 18 Apr 2009 13:16:06 GMT

So I sent a letter to chase about the credit limit, and about a week later score watch sent me an update saying that "comsumer disputes investigation in process" and then a day later it updated again saying the same thing, but also "amount in H/C column is credit limit"

Now on my TU Report it shows like this:

Balance [?] $14,308
Current Status [?] Paid or paying as agreed
Past Due Amount [?] $0
Credit limit [?] $100
Largest past balance [?] $18,297
Terms [?] MIN
Account Type [?] Revolving Account
Account holder [?] Individual Account
Scheduled payment amount [?] $322

And on my EQ Report:

Balance [?] $14,308
Current Status [?] Paid or paying as agreed
Past Due Amount [?] Not Reported
Largest past balance [?] $100
Terms [?] Not Reported
Account Type [?] Revolving
Account holder [?] Individual
Scheduled payment amount [?] $322

it doesn't even show a credit limit and says the largest past balance is $100 and so, ...what is H/C column?

and also when something is "being investigated" does it factor into your credit score in the same way?

Message Edited by JBoswell on 04-18-2009 09:16 AM

Re: Credit Utilization?

Anonymous — Sat, 18 Apr 2009 14:12:57 GMT

JBoswell wrote:

it doesn't even show a credit limit and says the largest past balance is $100 and so, ...what is H/C column?

H/C column is High Credit or largest past balance. When no CL is reported, the scoring formula uses the H/C for your limit. This is true on open and closed accounts. For instance, CFNA/Firestone doesn't report limits, so the H/C is used for limit when calculating util.

and also when something is "being investigated" does it factor into your credit score in the same way?

No, certain aspects about it is ignored.
Message Edited by JBoswell on 04-18-2009 09:16 AM

Re: Credit Utilization?

JBoswell — Sat, 18 Apr 2009 14:47:08 GMT

So does that mean that the "credit limit" would be calculated as the $18,000 instead of the $100?
If some things are "ignored" does it impact your credit score? As in should I expect my score to drop again when they are done "investigating"?

Re: Credit Utilization?

Anonymous — Sat, 18 Apr 2009 15:03:24 GMT

JBoswell wrote:
So does that mean that the "credit limit" would be calculated as the $18,000 instead of the $100?
If some things are "ignored" does it impact your credit score? As in should I expect my score to drop again when they are done "investigating"?

1-- No, because TU is reporting a CL. High balance is only used if no CL is listed.

2-- Depends. If it dropped when the account was marked in dispute, then it could possibly raise back up when it is no longer in dispute or it could drop even more, depending on the changes made.

The things that are ignored are not included in your score anymore....if those things were helping-- then your score drops, if they were hurting-- then your score rises. But those changes could be temporary based on the results of the disputes.

Message Edited by sidewinder on 04-18-2009 10:03 AM

Re: Credit Utilization? - Another Question

Anonymous — Sun, 19 Apr 2009 11:12:21 GMT

Utilization on closed credit cards is counted...your original credit limit on that card is what is no longer factored into your utilization. You now owe over $14,000 on a card with a $100 credit limit. NOT $14,000 on a $22,000 card

If you owed only $100 on this ccard you would be at 100% utilization.

YES, this is killing your scores. You should pay off these closed cards as quickly as possible!

Message Edited by VEEnVEGAS on 04-19-2009 04:12 AM

Re: Credit Utilization?

JBoswell — Sun, 19 Apr 2009 12:28:32 GMT

So it's not really a resolution at all. What was the point then in them updating the description to say "Amount in H/C Column is credit limit"? Why not have just left it alone if it makes no difference. lol. Yesterday I also got a mail response to the letter I had sent them in which they said "the high balance reported is accurate based on our investigations and we have enclosed a copy of your previous bill for validation" --- which, yea, the high balance is accurate, but that wasn't even remotely when I was disputing. I disputed the credit limit. But in all of my correspondence to them they ignore my requests for fixing that and just "validate" some other random information that I wasn't even inquiring about. @)(#*)!@*#%@#%^!@ it's just getting so frustraiting.
The dispute actually helped my score, Utl. changed from the 329842074108410948% to "not reported" so I guess my score will drop again when resolved. I probably should have waited to get the reports until AFTER it was resolved because I've also had several collections removed and now I have no idea what my actual (not dispute confused) credit score is.

and to the other response...

You now owe over $14,000 on a card with a $100 credit limit.

I know. I just don't understand why they get to drop the credit limit by $21,900 when the account is closed. And I wish I could just pay it off but unfortunately $14,000 is not so easy to come by lately lol The monthly payment on this card is bad enough it would be REALLY hard for me to allocate any more to it without effecting my ability to pay off other bills

Re: Credit Utilization?

Anonymous — Sun, 19 Apr 2009 15:00:16 GMT

I don't see how they can CLD after the account is closed.

And, what would be the point? The account is closed.

I would send a letter(not dispute) requesting 3 things from the OC. I wouldn't even make it remotely appear to be a dispute.

1) Current Balance

2) Highest Previous Balance

3) Credit Limit on the account.

Is this beyond SOL?

Re: Credit Utilization?

Anonymous — Sun, 19 Apr 2009 15:02:54 GMT

JBoswell wrote:
So it's not really a resolution at all. What was the point then in them updating the description to say "Amount in H/C Column is credit limit"? <<< That is something your report/the CRA tells you, I don't think the creditor adds that comment, but I could be wrong. Why not have just left it alone if it makes no difference. lol. Yesterday I also got a mail response to the letter I had sent them in which they said "the high balance reported is accurate based on our investigations and we have enclosed a copy of your previous bill for validation" --- which, yea, the high balance is accurate, but that wasn't even remotely when I was disputing. I disputed the credit limit. But in all of my correspondence to them they ignore my requests for fixing that and just "validate" some other random information that I wasn't even inquiring about. @)(#*)!@*#%@#%^!@ it's just getting so frustraiting.
The dispute actually helped my score, Utl. changed from the 329842074108410948% to "not reported" so I guess my score will drop again when resolved. I probably should have waited to get the reports until AFTER it was resolved because I've also had several collections removed and now I have no idea what my actual (not dispute confused) credit score is.
and to the other response...

You now owe over $14,000 on a card with a $100 credit limit.

I know. I just don't understand why they get to drop the credit limit by $21,900 when the account is closed. And I wish I could just pay it off but unfortunately $14,000 is not so easy to come by lately lol The monthly payment on this card is bad enough it would be REALLY hard for me to allocate any more to it without effecting my ability to pay off other bills

Re: Credit Utilization?

Anonymous — Sun, 19 Apr 2009 15:04:04 GMT

If they aren't going to display the CL at the time of closure, you'd be better off having a $0 CL displayed and just the highest past balance reported correctly.

Re: Credit Utilization?

Anonymous — Sun, 19 Apr 2009 19:44:43 GMT

@JBoswell wrote:

and to the other response...

You now owe over $14,000 on a card with a $100 credit limit.

I know. I just don't understand why they get to drop the credit limit by $21,900 when the account is closed. And I wish I could just pay it off but unfortunately $14,000 is not so easy to come by lately lol The monthly payment on this card is bad enough it would be REALLY hard for me to allocate any more to it without effecting my ability to pay off other bills

@ Sidewinder wrote:

I don't see how they can CLD after the account is closed.

And, what would be the point? The account is closed.

I would send a letter(not dispute) requesting 3 things from the OC. I wouldn't even make it remotely appear

to be a dispute.

______________________________________________________________________________________________

I'm pretty sure that any closed account normally reports as 0 credit limit. At least the only ones I've ever seen did. I was a little surprised they showed her with $100 limit.

Sidewinder, I believe the point as far as the credit card company is concerned is to encourage the creditor to hurry up and pay the balannce off.

You NEVER want to have an account closed with any balance on it at all.

JBoswell, I understand that $14,000 is an awful lot of money, now or at any time. But I don't believe you will see your scores rise a great deal until these accounts are paid down/off. You asked if you should put extra money toward this account or pay off other accounts. In .my opinion you need to put anything extra toward this closed account

Message Edited by VEEnVEGAS on 04-19-2009 12:44 PM

Re: Credit Utilization?

Anonymous — Mon, 20 Apr 2009 05:22:08 GMT

Many closed accounts report the CL at the time of closing.

The spouse has a CC that the creditor closed without notice, while it had a balance on it. The CL is still being reported and the account is affecting utilization just like it did when it was open.

In the case of the OP, if the CL showed $0 or the correct CL, it would help much more.

With the current CL being reported as $100, with a balance of $14,000, util is 14000%(I think)

With the CL reported as $0, FICO uses largest past balance, which is reported as $18,000, so util would be 78%.

With the correct CL of $22,000 being reported, util would be 64%.

Big differences there, especially when you are talking about being >100% util and <100% util.

Re: Credit Utilization?

Anonymous — Mon, 20 Apr 2009 09:58:23 GMT

Credit limit on a closed account does not factor into utilization. The balance still does. Really doesn't matter whether they gave gave her husband notice that the card was being closed.

Yes, they are at over 14000% utilization on this card.

Message Edited by VEEnVEGAS on 04-20-2009 02:58 AM

Re: Credit Utilization?

JBoswell — Mon, 20 Apr 2009 10:57:42 GMT

I don't see how they can CLD after the account is closed.
And, what would be the point? The account is closed.

I would send a letter(not dispute) requesting 3 things from the OC. I wouldn't even make it remotely appear to be a dispute.

1) Current Balance
2) Highest Previous Balance
3) Credit Limit on the account.

Is this beyond SOL?

I have no idea, when the account was closed it was quite a process. I had missed three months payments back in '04 when I got out of college and was looking for a job, they called and said they were closing the account and that if I didn't pay the entire past due balance within the week they would sue me etc etc. So I took everything I had in savings and threw it at the card. They said that as long as I made payments in July - Sept. on time my account would come out of "negitive status" with them, and they'd no longer report me as being 90 days late on the account. So I did, and they did. But for some reason, when we came to this agreement they began reporting the card different, instead of saying "opened in 6/04" in said "opened in 6/06" and instead of the "$22,000 limit" it had before it reported with "$100 limit". I tried calling - at first just to try and understand why and nobody I talked to seemed to have a clue or the ability to fix it.

As for what to ask them for, that is what i tried to do, and they responded by sending me an old bill - the bills also now say that the credit limit is $100 and their letter only acknowledged that I was asking about the high balance, which I wasn't, because it wasn't wrong.

As for the "SOL" I really thought that only referred to collections account or accounts that you aren't in good standing with so I dont know, I've been paying the card on time, have no past due balance, whether or not they can sue me I'm not sure, I don't think they would though unless I fell behind again.

If they aren't going to display the CL at the time of closure, you'd be better off having a $0 CL displayed and just the highest past balance reported correctly.

The highest past balance is reporting correctly, but they are and have been reporting a credit limit, so I don't really know how to get them to fix it.

JBoswell, I understand that $14,000 is an awful lot of money, now or at any time. But I don't believe you will see your scores rise a great deal until these accounts are paid down/off. You asked if you should put extra money toward this account or pay off other accounts. In .my opinion you need to put anything extra toward this closed account

I had, but I had actually asked in reference to two of my husband's cards because I had thought paying them off to $0 (which we can do) would be better than paying chase off $3,000 and having it still not even be close to $0, my question was more about that. We need *both* our credit scores in good shape to get a mortgage we have a limited amount of money I just wanted to know where it would be better used. Believe me if we have $14k instead of $3k I would LOVE to pay off chase, I just didn't think it would be the best allocution of the funds at this point. I later asked about the credit limit thing with chase, because everything started appearing strangely on my credit report after sending in a letter asking them what was going on.

Credit limit on a closed account does not factor into utilization. The balance still does. Really doesn't matter whether they gave gave her husband notice that the card was being closed.

... and now I'm confused. lol. does the credit limit factor in or no? I appreciate all the feedback, I'm just getting a little mixed up about it, I had to have a cup of coffee and look up about 12 abbreviations before I could even tackle responding.I guess ultimately, I had just wanted to know about paying off my husbands WAMU (Chase) Card and Citizens Bank CC and in what order and etc etc. As far as my own stuff I was really just trying to understand HOW the credit limit is being factored in and why the hell it dropped and what I can do about it and etc. It seems like you get a lot of different opinions on this. People have said the credit limit still counts, or it doen't or it's the high balance or it's 0 and my head popped and I now have no idea lol. If the credit limit DOES factor in, then I should obviously try to get it to report accurately, if it doesn't or if it reports as 0 or the high balance, then there probably isn't much of anything I can do besides continue to pay the monthly amount and keep the account in the "paid/pays as agreed" status until I can pay the whole thing off.

Re: Credit Utilization?

Anonymous — Mon, 20 Apr 2009 11:20:09 GMT

VEEnVEGAS wrote:
Credit limit on a closed account does not factor into utilization. The balance still does.

Credit limit DOES factor into utilization on closed accounts. It is happening with my spouse's closed account.

Message Edited by sidewinder on 04-20-2009 06:20 AM