topic Re: NFCU changes credit limit after CO in Rebuilding Your Credit

NFCU changes credit limit after CO

virgo — Fri, 15 Feb 2019 23:19:45 GMT

Hello All,

Its been a long time since I have posted anything.

My friend is having a problem with navy federal. He had their credit card that started with an 8500 limit. He then got an increase to 15000.

Due to an injury, he fell behind and it was charged off. When I looked at his CR's they had put the limit back to 8500. That is seriously hitting his utilization as it claims he's using like 185 % of his limit.

I have never seen any company doing this. Shouldnt his high limit still say 15000?

Your thoughts.

Thank you.

Re: NFCU changes credit limit after CO

RobertEG — Fri, 15 Feb 2019 23:29:50 GMT

It is very common for creditors to reduce risk by lowering credit limits when they detect events that indicate increased lending risk.

Having a debt become delinquent to the point that it is charged-off is not a surprising basis for reduction of credit limit.

Having only minor delinquencies can often result in a CLD.

Re: NFCU changes credit limit after CO

virgo — Fri, 15 Feb 2019 23:40:44 GMT

Thank you for your response.

I'm just a little confused as they didn't lower it while he was having trouble. But, only after it was charged off.

Wouldnt that be an err in reporting as he was granted the increase. Otherwise, why not just lower it to 2500.

I understand the process of limit chasing, I guess I assumed that once it was raised, that would be the limit that was reported.

Thank you again Robert.

Re: changes credit limit after CO

gdale6 — Sat, 16 Feb 2019 18:46:11 GMT

What they did is a CLD before they COed to make sure it would be a maximum hit to the Fico score, its games they all play. I would just be working to pay it off. It is legal to do this.

Re: NFCU changes credit limit after CO

RobertEG — Sat, 16 Feb 2019 22:49:10 GMT

As I understand the question, it is asserted that they have inaccurately reported the credit limit as being X when it was actually Y.

More specifically, they granted a CLI, but either inaccurately reported the limit at the lower amount, or they decreased the limit, and incorrectly reported it at a higher amount.

Either way, the consumer has no way of knowing the exact date that the creditor actually decreased the credit limit.

Even if they reported an inaccurate credit limit, that would only provide basis for a dispute, and a requirement that they investigate and correct if the reported limit was different than the actual limt in effect when they made that reporting.

They would need only to verify the accuracy as reported or to correct.

It would not mandate any other correction or deletion.

If the last reporting is of the new limit after reduction, that appears accurate and is the only reporting that is currently determining the % util, so a dispute contesting the accuracy of any prior reporting would appear to have no substantive impact.

I am unsure what is to be gained by any disputing of accuracy of prior reporting that might or might not be accurate.....