Card over limit credit score goes down will it recover?

[MountainHiker]

Hi everyone.

There was a question put to me that I could not answer. But I knew where to go for that information. Here!

I have a friend who just went over her spending limit accidentally. She experienced interest fees that put her over her credit card limit. When it reported to her credit bureau she lost around 17 FICO points or there abouts. Can't remember exactly how much she said. In any case she can't pay her card down right away but she did pay enough to get her card back under the spending limit.

Her question is this, will just getting it back under the spending limit recover any of those fico points when the account reports again?

Thanks for answering this question. I had no idea what to tell her. 

[M_Smart007]

17 FICO's is not really a huge deal ..IMO

Here are Utilization breakpoints -> 88.9%, 68.9%, 48.9%, 28.9% & 8.9%

To regain scores, one would want to get the card under these^^. The lower the Utilization ..the better.

Having a card report over 88.9% is really considered "maxed out" and is usually not good practice.

Others will chime in.....

[FireMedic1]

Your friend will get a few points back. You didnt say which card it is. Few will close it. Leaving a balance on the edge of OTL is risking it for many months. Get it down to at least 89% and then more points will come back. Right now its finances over FICO. Get the debt down and quit using the card. Actually take it from them until the swipe fever is gone. You'd do them a favor.

[ptatohed]

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@MountainHiker wrote:

Hi everyone.

There was a question put to me that I could not answer. But I knew where to go for that information. Here!

I have a friend who just went over her spending limit accidentally. She experienced interest fees that put her over her credit card limit. When it reported to her credit bureau she lost around 17 FICO points or there abouts. Can't remember exactly how much she said. In any case she can't pay her card down right away but she did pay enough to get her card back under the spending limit.

Her question is this, will just getting it back under the spending limit recover any of those fico points when the account reports again?

Thanks for answering this question. I had no idea what to tell her. 

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I doubt going over the spending limit hurt her nor will paying the card down to just below the CL help her.  The 17 point loss is probably from something else.  You didn't say what her balance on this card was before going over the limit but if it was a low balance to, all of a sudden, a maxed out balance, that could do it.  

[MountainHiker]

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@M_Smart007 wrote:

17 FICO's is not really a huge deal ..IMO

Here are Utilization breakpoints -> 88.9%, 68.9%, 48.9%, 28.9% & 8.9%

To regain scores, one would want to get the card under these^^. The lower the Utilization ..the better.

Having a card report over 88.9% is really considered "maxed out" and is usually not good practice.

Others will chime in.....

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Thank you M Smart. I will share those data points when next I speak with her. I think those fees caught her by surprise. Essentially she needs to pay her card down to avoid this situation happening again. 

[MountainHiker]

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@FireMedic1 wrote:

Your friend will get a few points back. You didnt say which card it is. Few will close it. Leaving a balance on the edge of OTL is risking it for many months. Get it down to at least 89% and then more points will come back. Right now its finances over FICO. Get the debt down and quit using the card. Actually take it from them until the swipe fever is gone. You'd do them a favor.

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Hi FireMedic

It's her TD bank visa. Think she was getting ready to buy a car in a few months but her score went down which affects her financing tier options. I think it caught her by surprise that her score took a hit for simply going a couple dollars over her limit because of interest fees.

I personally didn't know what to tell her because I've never heard of that before. Didn't know it was possible to be penalize for going her balance reporting a couple dollars higher than the actual spending limit. 

And she's not mistaken because she sent me a picture of it. Essentially the credit report says she lost the points for going over the limit. I think she learned a lesson. 

[MountainHiker]

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@ptatohed wrote:

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@MountainHiker wrote:

Hi everyone.

There was a question put to me that I could not answer. But I knew where to go for that information. Here!

I have a friend who just went over her spending limit accidentally. She experienced interest fees that put her over her credit card limit. When it reported to her credit bureau she lost around 17 FICO points or there abouts. Can't remember exactly how much she said. In any case she can't pay her card down right away but she did pay enough to get her card back under the spending limit.

Her question is this, will just getting it back under the spending limit recover any of those fico points when the account reports again?

Thanks for answering this question. I had no idea what to tell her. 

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I doubt going over the spending limit hurt her nor will paying the card down to just below the CL help her.  The 17 point loss is probably from something else.  You didn't say what her balance on this card was before going over the limit but if it was a low balance to, all of a sudden, a maxed out balance, that could do it.  

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Hi

She likes to run up her card quite often. Think she was about $10 under her spending limit and when her interest fees hit the account reported two or three dollars over her limit. 

[Anonymous]

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@MountainHiker wrote:

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Hi

She likes to run up her card quite often. Think she was about $10 under her spending limit and when her interest fees hit the account reported two or three dollars over her limit. 

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So, these were just interest fees, not (the now very rare) Over-the-limit fee?   Apart from FICO, the other question is whether TD cares.  Probably not, but if they do she will be balance-chased as she pays down the card.

[MountainHiker]

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@Anonymous wrote:

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@MountainHiker wrote:

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Hi

She likes to run up her card quite often. Think she was about $10 under her spending limit and when her interest fees hit the account reported two or three dollars over her limit. 

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So, these were just interest fees, not (the now very rare) Over-the-limit fee?   Apart from FICO, the other question is whether TD cares.  Probably not, but if they do she will be balance-chased as she pays down the card.

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She explained the over limit situation as being fee related. And she wasn't hit with a over the limit fee because it wasn't caused by spending. 

[M_Smart007]

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@MountainHiker wrote:

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@Anonymous wrote:

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@MountainHiker wrote:

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Hi

She likes to run up her card quite often. Think she was about $10 under her spending limit and when her interest fees hit the account reported two or three dollars over her limit. 

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So, these were just interest fees, not (the now very rare) Over-the-limit fee?   Apart from FICO, the other question is whether TD cares.  Probably not, but if they do she will be balance-chased as she pays down the card.

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She explained the over limit situation as being fee related. And she wasn't hit with a over the limit fee because it wasn't caused by spending. 

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That is great news