Should issuers do this?

[SRT4kid93]

When you get a credit limit increase should companies automatically do a mid cycle report to the bureaus? 

in my experience, I almost always get increases right after my statement closes. So it's usually a month delay before the increase gets reported. 

yes, some of the time it won't make any difference and waiting that month isn't a big deal.

But for people with higher utilization it could change their profile fairly dramatically. 

for example)

someone has 2 cards, an Amex with a 9k limit and capital one with 3k

They have 7k balance on Amex and 1500 on cap one, that's a over 75% on the Amex, 50% cap one, and over 70% aggregate

they then get a 3x increase to 27,000

changing their utilization to 25% Amex and 28% aggregate 

[JoeRockhead]

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@SRT4kid93 wrote:

When you get a credit limit increase should companies automatically do a mid cycle report to the bureaus? 

in my experience, I almost always get increases right after my statement closes. So it's usually a month delay before the increase gets reported. 

yes, some of the time it won't make any difference and waiting that month isn't a big deal.

But for people with higher utilization it could change their profile fairly dramatically. 

for example)

someone has 2 cards, an Amex with a 9k limit and capital one with 3k

They have 7k balance on Amex and 1500 on cap one, that's a over 75% on the Amex, 50% cap one, and over 70% aggregate

they then get a 3x increase to 27,000

changing their utilization to 25% Amex and 28% aggregate 

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Why stop at CLIs?

Should issuers do a mid-cycle report every time someone pays down a balance?  Every time someone makes a purchase?  Every time utilization changes by X%?

Credit reporting has always been a periodic snapshot system, not a real-time score optimization service.  You're focusing on the one scenario where a consumer gets a big CLI and their utilization drops.  What about the guy who gets a limit decrease?  Should that get reported immediately too?  What about someone who runs up another $10,000 right after getting the increase?

If the answer is "report positive changes immediately but not negative ones," then we're not talking about accurate reporting anymore.  We're talking about selectively reporting things that boost scores.  The increase will hit the bureaus in a few weeks.  If someone has a mortgage application tomorrow, they can ask for an off-cycle update.  That's a much more practical solution than redesigning credit reporting because a few people don't want to wait until the next statement closes.  My vote = No.

[FicoMike0]

With 75% utilization, you might not get the cli anyway.

[Vinjints]

I'm siding with Joey Rock on this one. You could also say as soon as you apply and add a new card to your wallet, that needs to be reported right away. How would that play out with those that like to go on sprees?

[SRT4kid93]

@JoeRockhead 

All great points, and very interesting discussion. You are 100% right, for example.

chase is the only issuer I know of that mid cycle reports when balances are paid down. (Something I actually like)

but you could go from $0 balance and run up 30 grand and no mid cycle report. If issuers did this, it could potentially warn all other issuers immediately and scream "hey this guy is running up a huge balance on our card"

the only downfall is that the person could be 100% guaranteed to pay, and then you are scaring all the other issuers for no reason. 

but ultimately you make good points, if they do that for cli, but you don't do it when someone runs up a huge balance, it's not exactly a balanced or fair system .

[SusanJA]

It would probably be expensive for the credit card companies, and most cardholders wouldn't notice. 

[FicoMike0]

Those of us with the aven card can't get costal community bank to report to TransUnion at all, lol.

[ElvisCaprice]

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@FicoMike0 wrote:

Those of us with the aven card can't get costal community bank to report to TransUnion at all, lol.

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Now if we could only find a card that reports to TU only.  lol

[zerofire]

I think your over thinking this. If issuers had a choice they would never report anything. The catch is that there would not be any knowledge on how good or bad of a person you are. To stop that they use the 3 beureu's begrudgingly. They only need them to do the bare minimum so your idea is not going to help the banks. I would say the bank is not interested.