High balance

[vanillabean]

Let's say a credit card account is always paid in full by the due date and has a high balance so far of $10.

A new billing cycle starts. Ten days into it you charge $20. The day before the statement cut you pay $5.

What's the high balance that will be reported after the statement cut?

(The high balance is sometimes referred to as high credit or largest past balance.)

[saaws]

My understanding was that the high balance was the highest balance when the statement cuts.  However, on my HSBC Mastercard, the high balance was the highest amount ever recorded on the creditor's system ever, not when the statement cuts.

[AndySoCal]

High balance is the highest balance ever reached on the card.  High credit is the higher of the high balance and the credit limit. fileds.

[vanillabean]

It would appear that the monthly balance and the high balance will be $15 and $20 respectively.

Also, Brammy, (former?) Moderator Emeritus, posted some good thoughts on this in 2007.

[RobertEG]

If you have an established credit limit on your OC account, as most (other than some AXEX cards) have as part of your terms of revolving credit untilization, the high balance is really not significant in scoring.  That is the whole purpose behind the receint FTC rules requriing disclosure of any agreed credit limits.

As part of the new rules titled "Procedures to Enhance the Accuracy and Integrity of Informatiion Furnished to Credit Reporting Agencies," published in the Federal Rgister at 74 Fed Reg 31484 (July 1, 2009), when a furnisher of information reports an outstanding balance on an credit account, they must also report the consumer's credit limit.  As stated in the rules, "This is because the failure to include the credit limit can cause credit evaluators to inaccurately estimate how much available credit a consumer is using, which is an important factor in assessing creditworthiness."

Rules promulgated by a federal agency, and publised in the Federal Register, have the full effect and force of law, unless later ruled by a Federal court to contain provisions inconsistent  with law.  These rules are now the law.

If you have a CL on an account, reporting of that CL is no longer discretiionary.  They can no longer avoid use of this CL in your scoring just by not reporting it.  FICO wiill use CL, if reported, and not prior high balance, in calculating % util.

PS:  This same rule package also implemented the new "direct dispute process," enabling you to bypass the CRA in disputiing information in your CR, and send your disptue directly to the party who reported the disputed information.

Well worth the heavy reading.

[vanillabean]

Interesting stuff. So if I call up the CCC and ask why my CL is not reported, and they respond it's their policy not to report credit limits for this particular type of card, I can refer to the mentioned rules and state that their policy is unlawful?

[RobertEG]

Yes,

The rules published 7/1/2009 became effectve as of 7/1/2010.

[saaws]

Does this new rule apply to Visa Signature No Pre-set spending limit cards? because my card certainly doesn't report credit limit.

[vanillabean]

I searched for all instances of the word "failure" in the rules and found several, but no sentences resemble the one that Robert quoted.

I also located "open-end" in various places, but am not sure what to make of the context in which they are used!

[RobertEG]

The rule applies if your agrrement with the creditor included a specified credit limit.  If it was a no-CL card, then of course, the rule does not apply.

It applies to a credit limit that is in the possession of the creditor, and requires them to report it as part of the new "accuracy and integrity of  furnished informtion" rules.

If you have had trouble locating those rules, they have now been published as part of the Code of Federal Regulations. See cite below.

I must apoligize if you were confused by my prior statement that  

"As stated in the rules, "This is because the failure to include the credit limit can cause credit evaluators to inaccurately estimate how much available credit a consumer is using, which is an important factor in assessing creditworthiness.""

This statement is a quote from the rule making posting in the Fed Reg., and not actually part of the language of rule itself.  It was language taken from the Fed Reg in their explanation of the reasons for implementation of the final rule.

Just as meaningful in content, but not actual language of the rulw itself.  . 

I apologize if it caused you some some confusion in locating the actual rule. 
But here are the Federal Regualtons, divorced from comment:

The final rules are now published as part of the Code of Federal Regulations at:

16 C.F.R., Part 660, with an effective date of 7/1/2010.

The “Direct Dispute” rules are set forth in 16 C.F.R. 660.4

The “Accuracy and Integrity of Furnished Information” rules are set forth in 16 C.F.R. 660.3.

Attention, on this specfic issue of credit limits, is directed to 16 CFR 660, Appendix A, which includes under the definition of accuracy and intergrity of information reported to the CRA (37 CFR 660.3):, that credit reporting

“Includes the credit limit, if applicable and in the furnisher’s possession.”

   ( Appendix A, section I.(b).(2).(iii))

As an aside, their is also proposed rulmaking that has already been published in the Fed Register that would expand the "accuracy and integrity of furnishe informtion" uner 16 CFR 660.3 to additionally disclose the firm reporting of the opening date of any OC account.  However, that awaits final rulemaking.

It, hopefully, is destined to become Appendix B!

Then, maybe, requried reporting of a DOFD by the OC at the time of initial delinquency may become Appendix C?  Hmmmm... Maybe I reach too far!

I, personally, would have placed requrieement to early reporting of DOFD much higher on the prioritity list of items needing controll over credtit reporting than that of credit limit or date of new account, but nontheless, that is the priority taken by the rulemakers.  It, at least,  shows action on their part.

Their implementtion of the new direct dispute process is probably the best thing that has happened to consumer rights in disputing inaccurate credit reporting that has occured in the past decade.