topic Re: Credit limits decreased! in General Credit Topics

Credit limits decreased!

Anonymous — Wed, 13 Jan 2010 03:23:39 GMT

Please forgive me, this is my first post and I'm having trouble just getting it to work. Using an iPhone, sorry. Had to write this in a note book, cut and paste. Hint. Hint. What am I doing wrong?

Secondly I realize I might not even be in the right section at this point if I get this to work, but there is no turning back if the post takes, sorry again.

My frustration comes from everytime I pay down a bill they lower my limit to meet the balance.

Citi did it. Had 11,200 line of creit. Paid down to 9200 and that's what they lowered my credit limit to. Then to 6700.

Hsbc 9300 to 7500 to 5800

Discover 9500 to 7500 a week after I sent them a 1400 check.

I have been paying down all my bills and not financing anytimg. This is very frustrating because I think this hurts my score.

Just yesterday my scores all dropped about 20-30 for no reason I can think of. Had a monitoring service I just cancelled 2 minutes ago.

I have never been late. No collections. I owe less now than ever. And my scores are lower than ever. I'm p@ssed. Makes no sense.

One card actually closed me out. Said I didn't use it enough, balance was to high, too soon since I opened last account, haven't opened an account recent enough, I only make my minimum payments. I had that card since 1999. Never late. Never over limit.

Tell me whyI shouldn't opt out and not pay any of them? I'm that p,,,,d

One of my scores went from 708 to 669. Piss:d

I think the credit agencies, yea the same ones that sell advertisement on their credit sites on how to get out of debt free and rip of their main clients, should have to itemize our credit scores and I would like to be able to despite that.

I HAD BETTER CREDIT WHEN I HAD BAD CREDIT.

Tomorrow I willl list all my debts, balances, open dates, close, etc. The works. You can analyze it. I'm fed up and since the industry insists on keeping my score down, I'll keep my money. I don't need their credit. It was a matter of dumb stupid pride that tricked me into.

Did Trump feel foolish when his credit score took a dip after his bankruptcy?
Did Citicroup lose pride when they took $60 billion?

Am I getting of track? End rant.

Re: Credit limits decreased!

Jazzzy — Wed, 13 Jan 2010 03:53:55 GMT

Hi FinickyFico, and welcome to the forums. I wish it was under better circumstances.

I understand your frustration. Your credit card companies are chasing your balance down, and it's happening to a lot of people. You're not alone...although I doubt that makes you feel any better.

Credit standards have tightened drastically. You have made your creditors nervous by having large balances. A lot of people are defaulting, and they don't know who will and who won't...so they are tough on those who have used up to their maximum credit lines. You are right that, when they cut your credit lines, it hurts your score. That is because a large part of your FICO score is based on what they call your credit utilization. Your credit utilization percentage is your revolving debt divided by your total revolving credit lines. When they lower your credit lines, that raises your utilization percentage...and that, in turn, hurts your score.

Please, please, please don't quit paying your credit card bills if you can afford to pay them. It will take you at least 7 years to crawl back out of that bad credit hole...please don't put yourself in it if you don't have to. The true win is to get them paid off and thumb your nose at them.

Your key to this is getting those balances paid down ASAP. Do come back on and list your cards, their credit limits, their outstanding balances, whether they are open or closed, and what the interest rate is. You don't necessarily want to pay your closed account first (if you haven't already). You will get good advice here. The posters here can help you overcome this. But, please, in the meantime, keep making at least your minimum payments on time.

I wish I could help you with your iPhone issues. But...I once tried to look up a phone number I knew I had on my cell phone. Before I was done, I had taken 4 pictures of the upper corner of the room I was in. Maybe someone else can come along with iPhone advice.

Hang in there....

Re: Credit limits decreased!

Anonymous — Wed, 13 Jan 2010 03:56:22 GMT

FICO scores count your credit utilization. This is how much of your available revolving credit you are using. It sounds like to me your utilization is too high because of the credit limits being dropped. Nothing you can do but keep paying it down but utlization is a big factor and is the easiest way to gain and lose a lot of points. Thats probably where the 20-30 points came from unless you have had a late payment or chargeoff or collection something of that nature.

As for the limits being reduced it is hard to say. You could always call and ask and see if they tell you why they did it. This has been common lately and people with something risky are seeing it the most. This could be caused by a late payment, maxing out one or more cards, looking for a lot of new credit, and the list goes on. Anything they see on your report that looks risky and they may suddenly reduce your limits or close your accounts to protect themselves. Without seeing your report it is hard to say but it sounds like you have done something that has gotten their attention.

Re: Credit limits decreased!

Anonymous — Wed, 13 Jan 2010 04:41:11 GMT

As I said I will get all the info together tomorrow so the experts can pick it apart, but it is my experience that there is no ryhme or reason to it. Also, you sound like you work for the credit people. No insult intended. Just a job you screw. I can think of no reason for me to continue to pay off the $42-45k I owe. There will be no reprecussions. I don't need to borrow anymore money. What I would pay them I could save and pay in cash.

Why does the mafia have to file tax returns, but the high school drop out working at trans union doesn't have to explain your fico score to you? When you going to get really peavedoff ?

Re: Credit limits decreased!

Lel — Wed, 13 Jan 2010 07:55:56 GMT

As has already been mentioned, the high balances on your credit cards have spooked your creditors. When they do their account reviews, they can see the balances on your other credit cards. In these tough economic times, many people are defaulting on their credit cards and other debt obligations. The credit card companies are trying to protect themselves against losses. Persons with large amounts of credit card debt are seen as higher risk that those with smaller amounts of debt. As a consequence, as you pay down your credit card balances (a commendable effort so far, by the way), the credit card companies are lowering your credit limits out of concern that you may run your balance up again, increasing their risk of loss in case of default.

In regard to the question of whether you should pay of your debt, just keep in mind that there are both near term and long term consequences of defaulting on your debt. Even though you don't need to borrow any money now, that may change in the future. Your car may break down, and if you need a loan to buy another car, you may not be able to get a loan or you'll be stuck with a high interest rate. You would not be able to buy a home anytime soon if you have a lot of derogatory entries on your credit report. Even you just wanted to rent for a few years, you might not be able to get a new lease because many landlords check the credit of prospective tenants. Finally, many employers check an applicant's credit before hiring. You might have difficulty finding a job if you have a checked credit profile.

The last thing I'll say is that it's not going to do you any good to accuse those who offer you sound advice and logic of being credit industry insiders. I know you are angry at your credit card companies, but try to avoid directing that rage at people who are trying to help you. myFICO members - moderators included - are all "civilians" who have all been drawn to this site because we have had credit-related problems or questions for which we needed similar guidance and advice. Many have stuck around because they want to assist others by sharing the knowledge that they've gained from both their personal experiences and the contributions of others on these forums.

Re: Credit limits decreased!

Anonymous — Thu, 14 Jan 2010 22:01:07 GMT

I want to add also that by defaulting and ruining your credit your auto insurance rates may sky rocket and in fact they may dump you if you have one of the bigger firms insuring you.

Re: Credit limits decreased!

Anonymous — Sun, 17 Jan 2010 05:13:26 GMT

@Anonymous wrote:
As I said I will get all the info together tomorrow so the experts can pick it apart, but it is my experience that there is no ryhme or reason to it. Also, you sound like you work for the credit people. No insult intended. Just a job you screw. I can think of no reason for me to continue to pay off the $42-45k I owe. There will be no reprecussions. I don't need to borrow anymore money. What I would pay them I could save and pay in cash.

Why does the mafia have to file tax returns, but the high school drop out working at trans union doesn't have to explain your fico score to you? When you going to get really peavedoff ?

Maybe, maybe not.

If you meet the means test and are elegible to file for bankruptcy, the effects of having that on your credit report may be, in your situation, minimal.

However, simply walking away from your bills can very surely raise serious repercussions. There may be judgments obtained against you that result in liens on any property you own, attachments of your bank accounts and garnishment of your wages. Public records such as judgments can remain on your credit report for a long time and are available for view by prospective employers. I would at least make sure I was "judgment-proof" and not able to be effected by an employer checking my credit reports before thinking about walking away from my bills.

Re: Credit limits decreased!

Anonymous — Sun, 17 Jan 2010 17:36:04 GMT

First I'd like to say I was joking with Lynette when I called her an insider.

I just subscribed to myfico. It shows my score as being still 700. The other service I had gave my scores as TU 684, Ex 673 and Equ as 669. Which is correct?

Sorry it took so long for this info but it was hard to type. Can someone steal my id from this info?

Type Account opened Balance limit was Payment Closed
Credit card 07 5740 7505 9300 175 no
CC 06 0 3000 no
CC 06 9926 10390 160 no
CC 07 7100 7400 9200 140 no
CC 01 3100 3500 60 closed by
granter
CC 06 1280 4250 40 no
CC 01 0 2850 no
CC 00 0 3000 no
CC 02 Not rep 20000 329 no
I used to be authorized on this account but not anymore. Status date is 2006. Is it helping, hurting or non-factor?

LOC 06 6600 6700 11000 140 no
LOC 08 0 750 no
Secured loan 04 0 7100 175 Paid Off
CC 91 0 10000 closed
CC 02 0 Lost or stolen card closed
Auto 06 10000 24000 458 no
Auto 02 0 13300 299 paid
Auto 03 0 15000 336 paid

No inquiries, public records, collections. Never been late on any accounts.

Sorry It didn't look like that when I pasted it. Basically it goes like this

Credit card 06 (open date) 5000 (balance) 7500 (limit) 10000 (old limit) 100 (payment) No (is the account closed) Sorry

Message Edited by FinickyFico on 01-17-2010 11:36 AM

Re: Credit limits decreased!

marty56 — Sun, 17 Jan 2010 17:41:43 GMT

Then only way to be CLD and infact AA proof is to get out of CC debt. A DMP program would protect you from futher AA, or you could go it alone and use the debt snowball approach to get out of CC debt. Once done, your score should be high enough to get you a decent card from a CU that doesn't play AA games.

Keep in mind that you can't go and run the balances up again and that if you need to make a major puchases, or pay over time, there are better options than using a MC/VISA/AE/Discover.

Re: Credit limits decreased!

Anonymous — Sun, 17 Jan 2010 18:59:48 GMT

@Anonymous wrote:
@Anonymous wrote:
As I said I will get all the info together tomorrow so the experts can pick it apart, but it is my experience that there is no ryhme or reason to it. Also, you sound like you work for the credit people. No insult intended. Just a job you screw. I can think of no reason for me to continue to pay off the $42-45k I owe. There will be no reprecussions. I don't need to borrow anymore money. What I would pay them I could save and pay in cash.

Why does the mafia have to file tax returns, but the high school drop out working at trans union doesn't have to explain your fico score to you? When you going to get really peavedoff ?
Maybe, maybe not.

If you meet the means test and are elegible to file for bankruptcy, the effects of having that on your credit report may be, in your situation, minimal.

However, simply walking away from your bills can very surely raise serious repercussions. There may be judgments obtained against you that result in liens on any property you own, attachments of your bank accounts and garnishment of your wages. Public records such as judgments can remain on your credit report for a long time and are available for view by prospective employers. I would at least make sure I was "judgment-proof" and not able to be effected by an employer checking my credit reports before thinking about walking away from my bills.

All this and more. You'll basically live the life of a fugitive until the SOL have expired and gunk you create ages off your CBR's. I hope there's a nice check cashing place walking distance from your house. You won't be keeping a checking account for many years.

Re: Credit limits decreased!

Anonymous — Sun, 17 Jan 2010 19:25:51 GMT

I said that I wrote that out of frustration from continuously being ripped off by the credit card companies. Now I'm going to do it again. Every time I pay down balances and my score climbs, some one lowers my limits. Then my score lowers, then someone raises my interest rate, then some one lowers my limit, or they close my account then my score goes down. Snowball effect.

I love to say that I'm not paying anymore, but I always do. I forgot to post my income. Take home is $1450 per week. I have no mortgage, kids, wife or ex-wife. Paying isn't a real burden on me. It's the getting ripped off that is.

I don't really need a checking account to cash my checks if that is all I have to worry about. I'll never need a house loan. I own nothing in my name except a truck and a motorcycle. A credit check will never effect my job. My car insurance being doubled or dropped wouldn't concern me.

I have never made a minimum payment or a late payment.

But, I will keep on paying, because I'm a good customer and that is how they treat good customers. The bad customers were let off the hook and I paid for them with my tax money.

Anyway, I just wanted to know why my score keeps going down. I think I know now. The truecredit.com site wasn't giving me real scores. From this site TU is 706.

Re: Credit limits decreased!

Anonymous — Sun, 17 Jan 2010 19:34:37 GMT

But what you did do is carry too many, too high balances for too long and everybody noticed. That's the cause of your AA. Getting out of the corner you've painted yourself into without encountering further balance chasing is going to be very difficult. Best of luck.

Re: Credit limits decreased!

Anonymous — Mon, 18 Jan 2010 00:01:31 GMT

@Anonymous wrote:
I said that I wrote that out of frustration from continuously being ripped off by the credit card companies. Now I'm going to do it again. Every time I pay down balances and my score climbs, some one lowers my limits. Then my score lowers, then someone raises my interest rate, then some one lowers my limit, or they close my account then my score goes down. Snowball effect.

I love to say that I'm not paying anymore, but I always do. I forgot to post my income. Take home is $1450 per week. I have no mortgage, kids, wife or ex-wife. Paying isn't a real burden on me. It's the getting ripped off that is.

I don't really need a checking account to cash my checks if that is all I have to worry about. I'll never need a house loan. I own nothing in my name except a truck and a motorcycle. A credit check will never effect my job. My car insurance being doubled or dropped wouldn't concern me.

I have never made a minimum payment or a late payment.

But, I will keep on paying, because I'm a good customer and that is how they treat good customers. The bad customers were let off the hook and I paid for them with my tax money.

Anyway, I just wanted to know why my score keeps going down. I think I know now. The truecredit.com site wasn't giving me real scores. From this site TU is 706.

I also don't believe they are treating you fairly, but IMO it's better to understand the way the game is played and try to beat them at their own game. Carrying high balances is, in the CCC's opinion, not good. A possible solution, once you get your balances lower, is to have even more available credit and spread low balances amongst several cards. You spend the same and have the same overall balances, but just over more cards with higher limits.

Unlike some, I do not believe the CCCs should hold it against you if you use the available credit they give you. But, unfortunately, that's the way they play the game.

Re: Credit limits decreased!

Anonymous — Mon, 18 Jan 2010 00:50:07 GMT

There is a general misconception. The purpose of the revolving CL's is so you can buy something and pay for it a little later - not buy many things and revolve balances to infinity. If you carry too many, too high balances for too long it is going to lead to AA. Any more that 35% UTIL on any individual revolving sends the flag up. Leave the flag hoisted long enough and it will be noticed. The fact that most every issuer took AA in this circumstance should be telling. If you need to pay for something over a longer period of time you need to get an installment loan instead of carrying a balance on a CC.

Re: Credit limits decreased!

Anonymous — Mon, 18 Jan 2010 01:12:17 GMT

@Anonymous wrote:
There is a general misconception. The purpose of the revolving CL's is so you can buy something and pay for it a little later - not buy many things and revolve balances to infinity. If you carry too many, too high balances for too long it is going to lead to AA. Any more that 35% UTIL on any individual revolving sends the flag up. Leave the flag hoisted long enough and it will be noticed. The fact that most every issuer took AA in this circumstance should be telling. If you need to pay for something over a longer period of time you need to get an installment loan instead of carrying a balance on a CC.

Actually there wasn't any AA until after the most recent economic crisis and bailout. Two of my cards are owned by the same company. One card was decreased and the other card limit was increased. Like I said, same company. No rhyme or reason there.

The reasons I have been given for increased % (now how is that going to get my balance down quicker?) and credit decreases have been high balance, only making minimum payments (which is a lie), haven't used card recently, too soon since I opened last account, I have not had any new accounts recently (that one really gets me),.

Here is a legitimate question, why don't they lower the limits before I pay them down? Why wait or why not close the accounts now? One of them did because I was locked in at 6.99%. They will get minimum payments forever at that rate. They took over one of those bankrupt banks.I had that card for 10 years.

I'm not stupid. I understand the ccc made stupid decisions in the past and are scared now. They want their money back. In the mean time they are aggravating those that have never missed a payment. I used the credit when I had to. When I split with a domestic partner and had to start fresh. I have not carried or planned on carrying balances forever.

For those that are happy with the system, so be it. I'm not and don't have to be.

Re: Credit limits decreased!

Anonymous — Mon, 18 Jan 2010 01:35:34 GMT

@Anonymous wrote:
There is a general misconception. The purpose of the revolving CL's is so you can buy something and pay for it a little later - not buy many things and revolve balances to infinity. If you carry too many, too high balances for too long it is going to lead to AA. Any more that 35% UTIL on any individual revolving sends the flag up. Leave the flag hoisted long enough and it will be noticed. The fact that most every issuer took AA in this circumstance should be telling. If you need to pay for something over a longer period of time you need to get an installment loan instead of carrying a balance on a CC.

If there is any misconception, there can be little doubt that it was initiated and perpetuated by the CCCs themselves.

While members of this forum may be wise as to how the system works, we represent but an infinitesimal percentage of credit card customers. When banks market their products based on statements like "0% for six months" or even "0% for life" and tout minimum payments of 3% of the balance, it is reasonable to believe banks want you to go in debt up to the entire limit they give you -- and that has been historically the case up to the moment that it has come back to bite the banks in the fanny.

Re: Credit limits decreased!

Anonymous — Mon, 18 Jan 2010 02:02:11 GMT

High UTIL has never been a good idea. If it was a good idea FICO would not degrade your score for it. High UTIL is an indicator of financial distress and is predictive of the likelihood that you will default on a financial obligation, which is, after all, exactly what a FICO score is supposed to measure.

BTW, OP, they're doing you a favor by decreasing your CL after you pay down the balance rather than before. If they did it before your UTIL on the TL would exceed 100% and that is FICO doom, to say nothing of the OL fees that could attach.

Re: Credit limits decreased!

Anonymous — Mon, 18 Jan 2010 03:21:31 GMT

@Anonymous wrote:
High UTIL has never been a good idea. If it was a good idea FICO would not degrade your score for it. High UTIL is an indicator of financial distress and is predictive of the likelihood that you will default on a financial obligation, which is, after all, exactly what a FICO score is supposed to measure.

BTW, OP, they're doing you a favor by decreasing your CL after you pay down the balance rather than before. If they did it before your UTIL on the TL would exceed 100% and that is FICO doom, to say nothing of the OL fees that could attach.

In about 4 more days the OL fee issue would be moot.

Agree that high UTIL is not a good idea, but the whole concept of high UTIL is a product of CCCs' successful marketing campaigns. And, again, the overwhelming vast majority of CC customers have no idea about what FICO considers when scoring much less the whole high UTIL scenario.

Re: Credit limits decreased!

Anonymous — Mon, 18 Jan 2010 03:26:19 GMT

@Anonymous wrote:
High UTIL has never been a good idea. If it was a good idea FICO would not degrade your score for it. High UTIL is an indicator of financial distress and is predictive of the likelihood that you will default on a financial obligation, which is, after all, exactly what a FICO score is supposed to measure.

BTW, OP, they're doing you a favor by decreasing your CL after you pay down the balance rather than before. If they did it before your UTIL on the TL would exceed 100% and that is FICO doom, to say nothing of the OL fees that could attach.

I'm not sure about a favor, to me, but more likely to themselves after you gave me reason for thought. I think Congress would take notice of the practice that you mentioned.

The bottom line is I can just pay down the limits, which I have been doing recently at a pretty good pace. The ccc's are sticking it to the good paying customers because they know we will continue to pay. The ones that defaulted already have.
Thanks for responding

Re: Credit limits decreased!

Anonymous — Mon, 18 Jan 2010 03:35:30 GMT

The point really isn't what FICO considers this or that. The point is that high UTIL statistically indicates that you will have a higher likelihood of defaulting on a credit obligation. By definition FICO scoring measures the statistical likelihood of your defaulting on a debt within the next two years. You don't have to know what the factors are for the model to be correct. That's true whether you know them or not. The predictive power of statistical models like FICO scores is remarkably high. If you stray from the straight and narrow it's not FICO's problem or your issuer's - it's yours. Continuously running high UTIL on your CC's has never been a good idea. Not ever.