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Monday, September 14, 2009
A half truth that hinders your credit
A surprising number of lenders simply do not report consumer credit limits. Keeping this information out of your file is not necessarily an innocent oversight. Without that key piece of data, competitors are less likely to poach clients with preapproved offers.PayDay One is the only lender that is state licensed and offers a Great Rate Guarantee. Click here to learn more!
Capital One caused a stir when its credit-limit reporting tactics became public knowledge: Instead of reporting customers’ credit limits, it reported the highest balance carried, which gave the appearance that customers were much closer to maxing out their cards (a no-no for a stellar credit score) than they really were. (FICO scores no longer use this piece of Capital One data when computing consumer credit scores.)
You may want your credit card company to keep mum about how much it trusts you to spend, particularly if the spending limits on your cards are really low. Potential lenders see low limits as an indication that you haven’t earned a lot of leeway and that banks don’t want to give you too much slack in the leash, since they’ll be left with greater losses if you ran off without paying your bills.
If you want your lender to report your limits, and it’s not Capital One, call and ask. Sometimes, it’s company policy not to report, but at least you can try.