Credit card reduce credit limit

socra1976 · ‎10-07-2014

I have been trying desperately to increase my score. I am currently at 640. I have a couple 30 day lates and one charge off (2 years old so fairly fresh). Everything else is current never late including my mortgage. I have done some analysis and realize that if I can get my credit utilization under control then this should help significantly because I am around 80% utilization. I have been paying large chunks on each card monthly and citicard which has my highest credit limit 7500 keeps reducing my credit limit each time I pay so I'm getting nowhere. I've paid it down to $2000 and they just wrote to say they are reducing my credit limit to $2180. The other 2 cap 1's I have are near 30% utilization but because cit has now reduced by credit limit again making me again near 100% on that one card my ratios are still very high. Question should I just close the citicard account? I don't have enough to just pay off the entire 2K nor would I want to at this point given how they are screwing me over. What would you do? any advice?

coterotie · ‎10-07-2014

Pay off the two cap 1's first. Pay the minimum on the citi while calling them to reduce the interest rate. If you close the citi now it won't help your utilization at all. My guess is they pulled a bureau and saw the 30's and they are trying to get out while the getting is good. So make them wait. Have you tried the auto-luv on the cap1's? Any way to goodwill the 30 day late?

@socra1976 wrote:
I have been trying desperately to increase my score. I am currently at 640. I have a couple 30 day lates and one charge off (2 years old so fairly fresh). Everything else is current never late including my mortgage. I have done some analysis and realize that if I can get my credit utilization under control then this should help significantly because I am around 80% utilization. I have been paying large chunks on each card monthly and citicard which has my highest credit limit 7500 keeps reducing my credit limit each time I pay so I'm getting nowhere. I've paid it down to $2000 and they just wrote to say they are reducing my credit limit to $2180. The other 2 cap 1's I have are near 30% utilization but because cit has now reduced by credit limit again making me again near 100% on that one card my ratios are still very high. Question should I just close the citicard account? I don't have enough to just pay off the entire 2K nor would I want to at this point given how they are screwing me over. What would you do? any advice?

socra1976 · ‎10-07-2014

I've tried to goodwill the 30 day late with Wells and they have not responded to my request. I am planning to completely pay off Cap 1 by the 20th of this month as I only owe them about $750. the problem is even with zero balance on the cap1's I'd still be 100% utilization on citi due to them reducing the credit limit.

coterotie · ‎10-07-2014

Actually that is okay. The model looks at total utilization as well as individual account utilization. So if you can get the other cards paid down, get a score bump from that and either get a CLI or another card you can outrun the high utilization on the one card, looks like they are keeping it at 90%. IF you can get the score up to the 660 range, a bunch of cards open up to you. Is the Citi card still open?

@socra1976 wrote:
I've tried to goodwill the 30 day late with Wells and they have not responded to my request. I am planning to completely pay off Cap 1 by the 20th of this month as I only owe them about $750. the problem is even with zero balance on the cap1's I'd still be 100% utilization on citi due to them reducing the credit limit.

socra1976 · ‎10-07-2014

Thanks I will try this. Let's see.

taxi818 · ‎10-07-2014

I agree focus on cap one. And don't hurt yourself paying citi too much since they strong balance chasing. They. Will chase you all the way to a 100 dollar limit. Immsure those lates triggered it since charge off 2 years old. They are scared you will bail. Take your time. Utilization hasn't memory if they bring you even down to. 100 limit just pay off and font cancel. But don't use as well. After awhile they may raise you again. Or cancel you. But your util will be ok. Good luck.

takeshi74 · ‎10-08-2014

@socra1976 wrote:
Question should I just close the citicard account? I don't have enough to just pay off the entire 2K nor would I want to at this point given how they are screwing me over.

Nope. If you close it will probably report at 100% utilization even as you're paying it down since you have no available credit on the account.

They're not "screwing you". Your high utilization and other credit issues led to this. Payment History and Utilization (Amounts Owed) are the two biggest factors in assessing your credit, together accounting for 65% of your FICO's. The derogs and high utilization are both definitely problems.

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

Continue to pay it down. They may continue to balance chase you but you can see if they're willing to do anything once you've paid off the account and addressed your utilization with your other accounts as well. In the meantime you should also see what you can do to address your derogs as they will hold you back. Hit the Rebuilding subforum.

In the long run do whatever it takes to avoid derogs and never exceeed 30% utilization. Prolonged high utilization on its own is sufficient for some creditors to take adverse action. I've been there myself and it does suck but, again, it was my own fault and not the creditor screwing me.

FinStar · ‎10-08-2014

@takeshi74 wrote:
@socra1976 wrote:
Question should I just close the citicard account? I don't have enough to just pay off the entire 2K nor would I want to at this point given how they are screwing me over.
Nope. If you close it will probably report at 100% utilization even as you're paying it down since you have no available credit on the account.

They're not "screwing you". Your high utilization and other credit issues led to this. Payment History and Utilization (Amounts Owed) are the two biggest factors in assessing your credit, together accounting for 65% of your FICO's. The derogs and high utilization are both definitely problems.
http://www.myfico.com/crediteducation/whatsinyourscore.aspx

Continue to pay it down. They may continue to balance chase you but you can see if they're willing to do anything once you've paid off the account and addressed your utilization with your other accounts as well. In the meantime you should also see what you can do to address your derogs as they will hold you back. Hit the Rebuilding subforum.

In the long run do whatever it takes to avoid derogs and never exceeed 30% utilization. Prolonged high utilization on its own is sufficient for some creditors to take adverse action. I've been there myself and it does suck but, again, it was my own fault and not the creditor screwing me.

+1

Bottom line, you'll need a good strategy to retire those balances ASAP so you can recover from some of the damage.