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How does a card with no pre-set spending limit differ from a card with a limit when it comes to your UTIL and fico calculation?
The High Balance is not being counted. It is not figured in as part of my available credit.
AMEX Charge card should reported as Open or Other type, as opposed to Revolving.
If so balances are not included as part of revolving credit.
I, too, would like to know whether Fretless and Broccoli are right or whether Maestro is right.
IMHO, I highly doubt that they use high balance in the place of a credit limit as it would adversely affect those who spend the same amount each month...Though I'm no expert on the matter.
Mods?
Depending on how a no limit card reports to each CRA, the impact to scores will vary. A no limit card should report the following:
EQ: open account, a balance does not factor in revolving util calculations.
EX: revolving, terms 1 month, balance does not factor in revolving util calculations even though it reports as a revolving account.
TU: open account, a balance will factor in util calculations if the FICO scoring model TU98 (the one currently in use at this site when we pull TU scores) is used to generate your score. If TU04 is used to pull your score, open accounts do not factor in revolving util calculations.
Keep in mind if a balance is reporting, especially a big balance, this might have a negative impact on scores. This is not because of util, it's the mere fact that you owe money. It doesn't seem you lose a ton of points for this, but this is where FICO scoring gets very complicated, so I will leave it at that.
@fused wrote:Depending on how a no limit card reports to each CRA, the impact to scores will vary. A no limit card should report the following:
EQ: open account, a balance does not factor in revolving util calculations.
EX: revolving, terms 1 month, balance does not factor in revolving util calculations even though it reports as a revolving account.
TU: open account, a balance will factor in util calculations if the FICO scoring model TU98 (the one currently in use at this site when we pull TU scores) is used to generate your score. If TU04 is used to pull your score, open accounts do not factor in revolving util calculations.
Keep in mind if a balance is reporting, especially a big balance, this might have a negative impact on scores. This is not because of util, it's the mere fact that you owe money. It doesn't seem you lose a ton of points for this, but this is where FICO scoring gets very complicated, so I will leave it at that.
Sweet, thanks Fused.