Credit limits decreased!

[Anonymous]

I said that I wrote that out of frustration from continuously being ripped off by the credit card companies. Now I'm going to do it again. Every time I pay down balances and my score climbs, some one lowers my limits. Then my score lowers, then someone raises my interest rate, then some one lowers my limit, or they close my account then my score goes down. Snowball effect.

I love to say that I'm not paying anymore, but I always do. I forgot to post my income. Take home is $1450 per week. I have no mortgage, kids, wife or ex-wife. Paying isn't a real burden on me. It's the getting ripped off that is.

I don't really need a checking account to cash my checks if that is all I have to worry about. I'll never need a house loan. I own nothing in my name except a truck and a motorcycle. A credit check will never effect my job. My car insurance being doubled or dropped wouldn't concern me.

I have never made a minimum payment or a late payment.

But, I will keep on paying, because I'm a good customer and that is how they treat good customers. The bad customers were let off the hook and I paid for them with my tax money.

Anyway, I just wanted to know why my score keeps going down. I think I know now. The truecredit.com site wasn't giving me real scores. From this site TU is 706.

[Anonymous]

But what you did do is carry too many, too high balances for too long and everybody noticed. That's the cause of your AA. Getting out of the corner you've painted yourself into without encountering further balance chasing is going to be very difficult. Best of luck.

[Anonymous]

---

@Anonymous wrote:
I said that I wrote that out of frustration from continuously being ripped off by the credit card companies. Now I'm going to do it again. Every time I pay down balances and my score climbs, some one lowers my limits. Then my score lowers, then someone raises my interest rate, then some one lowers my limit, or they close my account then my score goes down. Snowball effect.

I love to say that I'm not paying anymore, but I always do. I forgot to post my income. Take home is $1450 per week. I have no mortgage, kids, wife or ex-wife. Paying isn't a real burden on me. It's the getting ripped off that is.

I don't really need a checking account to cash my checks if that is all I have to worry about. I'll never need a house loan. I own nothing in my name except a truck and a motorcycle. A credit check will never effect my job. My car insurance being doubled or dropped wouldn't concern me.

I have never made a minimum payment or a late payment.

But, I will keep on paying, because I'm a good customer and that is how they treat good customers. The bad customers were let off the hook and I paid for them with my tax money.

Anyway, I just wanted to know why my score keeps going down. I think I know now. The truecredit.com site wasn't giving me real scores. From this site TU is 706.

---

I also don't believe they are treating you fairly, but IMO it's better to understand the way the game is played and try to beat them at their own game.  Carrying high balances is, in the CCC's opinion, not good.  A possible solution, once you get your balances lower, is to have even more available credit and spread low balances amongst several cards.  You spend the same and have the same overall balances, but just over more cards with higher limits.

Unlike some, I do not believe the CCCs should hold it against you if you use the available credit they give you.  But, unfortunately, that's the way they play the game.

[Anonymous]

There is a general misconception. The purpose of the revolving CL's is so you can buy something and pay for it a little later - not buy many things and revolve balances to infinity. If you carry too many, too high balances for too long it is going to lead to AA. Any more that 35% UTIL on any individual revolving sends the flag up. Leave the flag hoisted long enough and it will be noticed. The fact that most every issuer took AA in this circumstance should be telling. If you need to pay for something over a longer period of time you need to get an installment loan instead of carrying a balance on a CC.

[Anonymous]

---

@Anonymous wrote:
There is a general misconception. The purpose of the revolving CL's is so you can buy something and pay for it a little later - not buy many things and revolve balances to infinity. If you carry too many, too high balances for too long it is going to lead to AA. Any more that 35% UTIL on any individual revolving sends the flag up. Leave the flag hoisted long enough and it will be noticed. The fact that most every issuer took AA in this circumstance should be telling. If you need to pay for something over a longer period of time you need to get an installment loan instead of carrying a balance on a CC.

---

Actually there wasn't any AA until after the most recent economic crisis and bailout. Two of my cards are owned by the same company. One card was decreased and the other card limit was increased. Like I said, same company. No rhyme or reason there.

The reasons I have been given for increased % (now how is that going to get my balance down quicker?) and credit decreases have been high balance, only making minimum payments (which is a lie), haven't used card recently, too soon since I opened last account, I have not had any new accounts recently (that one really gets me),.

Here is a legitimate question, why don't they lower the limits before I pay them down? Why wait or why not close the accounts now? One of them did because I was locked in at 6.99%. They will get minimum payments forever at that rate. They took over one of those bankrupt banks.I had that card for 10 years.

I'm not stupid. I understand the ccc made stupid decisions in the past and are scared now. They want their money back. In the mean time they are aggravating those that have never missed a payment. I used the credit when I had to. When I split with a domestic partner and had to start fresh. I have not carried or planned on carrying balances forever.

For those that are happy with the system, so be it. I'm not and don't have to be.

[Anonymous]

---

@Anonymous wrote:
There is a general misconception. The purpose of the revolving CL's is so you can buy something and pay for it a little later - not buy many things and revolve balances to infinity. If you carry too many, too high balances for too long it is going to lead to AA. Any more that 35% UTIL on any individual revolving sends the flag up. Leave the flag hoisted long enough and it will be noticed. The fact that most every issuer took AA in this circumstance should be telling. If you need to pay for something over a longer period of time you need to get an installment loan instead of carrying a balance on a CC.

---

If there is any misconception, there can be little doubt that it was initiated and perpetuated by the CCCs themselves. 

While members of this forum may be wise as to how the system works, we represent but an infinitesimal percentage of credit card customers.  When banks market their products based on statements like "0% for six months" or even "0% for life" and tout minimum payments of 3% of the balance, it is reasonable to believe banks want you to go in debt up to the entire limit they give you -- and that has been historically the case up to the moment that it has come back to bite the banks in the fanny. 

[Anonymous]

High UTIL has never been a good idea. If it was a good idea FICO would not degrade your score for it. High UTIL is an indicator of financial distress and is predictive of the likelihood that you will default on a financial obligation, which is, after all, exactly what a FICO score is supposed to measure.

BTW, OP, they're doing you a favor by decreasing your CL after you pay down the balance rather than before. If they did it before your UTIL on the TL would exceed 100% and that is FICO doom, to say nothing of the OL fees that could attach.

[Anonymous]

---

@Anonymous wrote:

High UTIL has never been a good idea. If it was a good idea FICO would not degrade your score for it. High UTIL is an indicator of financial distress and is predictive of the likelihood that you will default on a financial obligation, which is, after all, exactly what a FICO score is supposed to measure.

BTW, OP, they're doing you a favor by decreasing your CL after you pay down the balance rather than before. If they did it before your UTIL on the TL would exceed 100% and that is FICO doom, to say nothing of the OL fees that could attach.

---

In about 4 more days the OL fee issue would be moot.

Agree that high UTIL is not a good idea, but the whole concept of high UTIL is a product of CCCs' successful marketing campaigns.  And, again, the overwhelming vast majority of CC customers have no idea about what FICO considers when scoring much less the whole high UTIL scenario.

[Anonymous]

---

@Anonymous wrote:

High UTIL has never been a good idea. If it was a good idea FICO would not degrade your score for it. High UTIL is an indicator of financial distress and is predictive of the likelihood that you will default on a financial obligation, which is, after all, exactly what a FICO score is supposed to measure.

BTW, OP, they're doing you a favor by decreasing your CL after you pay down the balance rather than before. If they did it before your UTIL on the TL would exceed 100% and that is FICO doom, to say nothing of the OL fees that could attach.

---

I'm not sure about a favor, to me, but more likely to themselves after you gave me reason for thought. I think Congress would take notice of the practice that you mentioned.

The bottom line is I can just pay down the limits, which I have been doing recently at a pretty good pace. The ccc's are sticking it to the good paying customers because they know we will continue to pay. The ones that defaulted already have.
Thanks for responding

[Anonymous]

The point really isn't what FICO considers this or that. The point is that high UTIL statistically indicates that you will have a higher likelihood of defaulting on a credit obligation. By definition FICO scoring measures the statistical likelihood of your defaulting on a debt within the next two years. You don't have to know what the factors are for the model to be correct. That's true whether you know them or not. The predictive power of statistical models like FICO scores is remarkably high. If you stray from the straight and narrow it's not FICO's problem or your issuer's - it's yours. Continuously running high UTIL on your CC's has never been a good idea. Not ever.