How will this effect me?

[Anonymous]

In 2009 I received a store card for Becker Furniture World and purchased furniture for $2600.00 at 0% interest for two years. I have $414.00 left to pay and the financing ends July of this year. Wells Fargo did the financing and I have had perfect payments. Also, on my cu reports it lists it as revolving account. Sometime in 2009 after I financed through Wells Fargo Becker Furniture switched their financing from Wells Fargo to GE Money Bank. I was told by Becker my card is no longer good with them. Now here's the problem today I got a letter from Wells Fargo dropping my credit limit to $500 after reviewing tu credit report. I don't get it I can't use the card anymore but they drop my limit even after having perfect payments. Should I call Wells Fargo? Is this going to affect my fico scores? So confused about this.

[RobertEG]

It appears that both OC (Becker) and finance company 2 (GE Money Bank) are now totally out of your current financing picture.

Finance company 1 (Wells Fargo) is now apparently seeing two things.  An account that you have not used in approx 2 years, and the only creditor on that card is a company that has chosen to no longer do business with them.  I would suspect that they are taking the first step to clear out old, unused accounts.

When you pay off finance co. 1, it will disappear from all % util.  That was to be expected. 

Potential further impact on your FICO score could come once the account is paid off.  Then, if you have no creditor to use it with, they might either close the account, or delete it.  Closing wont cause you to lose its age of accounts, but deletion will.  You can talk to them, but this hardly looks like a future high profile account that they would be itching to preserve.

[Anonymous]

I'm still confused why did they bother dropping my cl?

[Anonymous]

---

@Anonymous wrote:
I'm still confused why did they bother dropping my cl?

---

Eeeew.  Dropping credit limits is stinky.  Why would they bother dropping it?

a) they may be looking at other things besides your payment history.  Creditors often soft you and react to other items on your credit report.  I've even had a creditor tell me that they didn't see me as pristine because I only made my minimum payments on time.  I just didn't know at the time that creditors consider that risky behavior - I thought I was golden.

b) they are probably not bound by the original creditor's viewpoint on what your CL should be.  Also, they are not motivated to keep your CL at the previous level to encourage you to purchase the furniture.

Yes.  This may impact your FICO inasmuch as your utilization percentage has changed.  According to my math it is now 83% (utilization is always rounded up), and previously the same balance would have been 15%.  Because this is a revolving account, that matters.  On the other hand, the fact that it is a revolving account means it is not in the "Consumer Finance" category - so that's a good thing.

It may be worth a call in to ask them to restore your previous credit limit.  Be friendly.  Remind them that you've managed your account with never late payments.  Tell them that you'd like to continue to build your relationship with GEMB, and let them know that this lowering of the CL may, infact, have an impact on your FICO score.  Keep your cool, call during regular business hours, and be willing to escalate.  Be prepared for them to be checking and responding to other accounts currently on your CR.  Listen more than talk.  That being said, if they don't restore the CL, don't despair and don't take it out on the CSR.  Pay that account down as soon as you possibly can.  And, in general, remember to stay away from these types of accounts - they look attractive in the beginning but can be problematic and difficult to manage well.

I'll keep my fingers crossed for you.  Just don't let it get to you.  Luckily your balance is fairly low.  When is the earliest you could pay it off altogether?