Capital One Refuses to Lower Our Credit Limit

[MarcinXP]

if you usually charge 4K a month then you should be fine...in-fact I see you fully pay it off...next time leave less than 9% on one of your cards. Also you have a 793 FICO...at this range...you pretty much will get the best rate and having higher score won't really matter much..you can go ahead and do refinance now

[jamesdwi]

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@Anonymous wrote:

Our credit score is actually 793.  The score report indicated one reason the score was "lowered" was the high revolving credit limit.  We have a total limit of 33k on three credit cards but usually charge, and fully pay off, about 4k per month.  I have read that the "sweet spot" on credit card "balance to limit" is around 30 percent, indicating that we need no more than around 13k in total credit limit.

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Lowering your credit limit will possibly negatively impact your score. By raising your UTL, and if any of your creditors compare new credit report vs previous one ( most creditors have internal scoring metrics and look at what ever they like to generate your internal score)  they will possibly take it as an extremely negative thing to do, Basicly you are screaming "I have too much credit and can't handle what I have, please lower my other limits as well"  Or they may think that your other creditors have lowered your limit, what do they know that I don't?  

With a 793, you are pretty much guranteed to get the best rates and near instant approvals and if you have a loan officer that applies with multiple lenders they may fight to get your business.   Ignore the fact you aren't over 800, it will happen in time, just use your cards PIF or at least keep your UTL below 9% and with time you will get over 800. 

[pizzadude]

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@Anonymous wrote:

Our credit score is actually 793.  The score report indicated one reason the score was "lowered" was the high revolving credit limit.  We have a total limit of 33k on three credit cards but usually charge, and fully pay off, about 4k per month.  I have read that the "sweet spot" on credit card "balance to limit" is around 30 percent, indicating that we need no more than around 13k in total credit limit.

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Where did you obtain this score ?   FICO scoring will never ding you for having high revolving credit limits.   

And the best starting point for optimizing your revolving utilization is to let one card report a small balance ( less than 9% ) while the other cards report zero balances.

[crunching_numbers]

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@Anonymous wrote:

Our credit score is actually 793.  The score report indicated one reason the score was "lowered" was the high revolving credit limit.  We have a total limit of 33k on three credit cards but usually charge, and fully pay off, about 4k per month.  I have read that the "sweet spot" on credit card "balance to limit" is around 30 percent, indicating that we need no more than around 13k in total credit limit.

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First, when the reports do not have any "legitimate" bad things to say, they have to still say something. High credit limits do not "ding" your FICO like they are implying.  

Second, do not confuse high limits with high revolving utility.  Utility is the balance to limit, and 30% IS NOT the sweet spot for that. The sweet spot is much lower at like 1-9%.  Most certainly, anything over 25% will hurt you.

I think you are mixing up terminology.  Re-read the report and see EXACTLY what the wording is on that negative.  I think you are confusing two different things.

[Anonymous]

Just to clarify, we do carry a balance month to month, we use one card on a regular bais and pay off the balance every month. But,because we use it regularly, there is technically always a balance of $1k - $4k (max). MarcinXP, I understand your comment of wanting a utilization rate of 5-9%, which means we should have a limit of $44-80k. Seems rather high to me! 

[Anonymous]

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@Anonymous wrote:

Just to clarify, we do carry a balance month to month, we use one card on a regular bais and pay off the balance every month. But,because we use it regularly, there is technically always a balance of $1k - $4k (max). MarcinXP, I understand your comment of wanting a utilization rate of 5-9%, which means we should have a limit of $44-80k. Seems rather high to me! 

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No, what this means is that you should lower the balance that REPORTS to the credit bureaus each month. I'm so glad you found this forum before you did something that would have been really hard to reverse. 

It sounds like the balance that reports to the CRA's for you each month is high. Even though you pay in full, you're not paying in full before it reports. You should not allow any more than about 2900 to report each month if you have 33K in available credit. 

[jsucool76]

These are just the balances that are reporting, if you pay off your balances right before your cards report, then whatever is left on them is what will report to the bureaus. So say your cards report the 15th, if you pay your balances down the 13th and 14th, then whatever is left is what will report to them (ideally, your 1-9% balances). 

[jamesdwi]

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@Anonymous wrote:

Just to clarify, we do carry a balance month to month, we use one card on a regular bais and pay off the balance every month. But,because we use it regularly, there is technically always a balance of $1k - $4k (max). MarcinXP, I understand your comment of wanting a utilization rate of 5-9%, which means we should have a limit of $44-80k. Seems rather high to me! 

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All it may take is just changing how you pay your bill,  find out the statement cut date, pay outstanding balance or at least all but 9% or less, don't use the card for the next 3 or 4 days let the card report a low balance. then you can use it again unless all of your cards report around the same time, you can just use one of them during the time you aren't using the one that is about to report. 

[crunching_numbers]

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@Anonymous wrote:

Just to clarify, we do carry a balance month to month, we use one card on a regular bais and pay off the balance every month. But,because we use it regularly, there is technically always a balance of $1k - $4k (max). MarcinXP, I understand your comment of wanting a utilization rate of 5-9%, which means we should have a limit of $44-80k. Seems rather high to me! 

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Yep. seems high, but that is the "credit" rules.  You need to have about 10 times the credit you plan to use.  If you pay in full before your statement actually cuts, you will show lower utility.

[webhopper]

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@crunching_numbers wrote:

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@Anonymous wrote:

Just to clarify, we do carry a balance month to month, we use one card on a regular bais and pay off the balance every month. But,because we use it regularly, there is technically always a balance of $1k - $4k (max). MarcinXP, I understand your comment of wanting a utilization rate of 5-9%, which means we should have a limit of $44-80k. Seems rather high to me! 

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Yep. seems high, but that is the "credit" rules.  You need to have about 10 times the credit you plan to use.  If you pay in full before your statement actually cuts, you will show lower utility.

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ya just like the other posters are saying... If you pay that balance down before the statement is actually released, then you're reported utility can be in that sweet spot of less than 9%