Well duh... I'd hope all Consumerist readers know that utilization is a factor in their credit score. I think most of us would also agree that in the past credit card companies gave people limits that were waaaaaay higher than they should be.

@Cant_stop_the_rock: What about people with reasonable limits who also suffered cuts? We’ve seen many stories about this with American Express. Since credit scores are important for so many purchases now, I wonder if a hit like this could be disputed.

does anyone recall the free website that gives you an estimate of your credit score and a breakdown of how many points you get in each category? not annualcreditreport.com, but there was another one that had a story here a couple months ago.

Chase just cut my Visa from $21,000 to $9,100 because of "utilization" (I maintain a zero balance on it). If that lowers my score, then so be it.

I'm not sure what they have achieved by doing this, but I'm still no more motivated to keep a balance on it and pay interest.

@craptastico: I think you're thinking of creditkarma.com

@AstroPig7: it's funny because i have five cards. two carry small 0% balances with limits of 5k and the others carry no balance but have limits of around 10k-15k each. guess which two just reduced my limit? they're not managing risk, just trying to punish me for taking advantage of their generous 0% credit offers.

@HiPwr:

I would say they are just protecting themselves in case of a worse-case-scenario on your part. What is you loose your job and need to start using your credit card more and carrying a balance. They want to make sure you don't run up $21k in balanced right before you file bankruptcy or charge-off. While this may never happen, they are just reducing their liabilities overall.

Technically... this shouldn't be true.

Credit scores are supposed to reflect your rating against the general population. Therefore, if millions of consumers have their credit slashed through no fault of their own, the metrics for calculating your score should be adjusting in concert.

The fact that Fair Isaac (the firm that calculates most of the scores) is saying "duh that's weird" is rather disturbing.

I've thought about this as well. If everyone's score is lowered across board, the average score changes so does that mean the criteria for a good versus bad score changes as well?

As in previously a great score was 800+, but if more than half of those people are now in the 700 range, does 800+ still remain the ideal or do our standards drop with our collective scores?

I smell a massive class action lawsuit against Fair Isaac if they don't find a way of recalculating their scoring process to compensate for credit lines reduced or eliminated through no fault of the consumer.

I've been pleasantly surprised to find none of my limits cut. Not sure how I've avoided the ax.

@craptastico: i forgot to mention, one of the cards with a balance, and one without are actually both Chase (one previously Wamu) and they still lowered the one with the lower 0% balance while the one with no balance has 3x higher limit

@Coles_Law: that's it thanks a lot. i don't know why i didnt bookmark it before

@friendlynerd: All mine keep going up...strangely. Seeing stories about credit limit cuts the same week you got a credit increase without asking makes me feel like I'm living in a parallel universe.

Question: if people all over the nation are having their scores altered through no fault of their own, does the FICO score retain any of its relevance? I think it's high time we re-evaluated how we evaluate people's credit.

@craptastico: Credit Karma is awesome. Though its only an approximation, it still helps keep you up to date with what's going on in your credit profile.

@TinkishDelight: My parents have maintained EXCELLENT credit since they were in their late 20's and yet they still haven't managed to cross the 800 mark. I was speaking with them the other day and brought that up and they vehemently insisted they *do not* have an 800. Most likely, my score is higher than theirs right now O_o

@friendlynerd: My credit card I opened in 2004 started with a $1000 limit and the next year went up to $1300, which realistically has only been a limit in one situation for me so far. Otherwise it seems a reasonable amount but it would've made me happy to see it going up further this whole time.

@HiPwr: They probably did it to lower their overall risk. Even if consumers aren't using credit that's available to them, it's still credit that the bank has extended, so it's risk.

Don't forget that a bank can in fact lower your limit BELOW your balance.

I know my own score has plummeted. Two cards were axed simply because I had them for less than two years, and the limits weren't "high enough". (both were above $3000) I'd never made a late payment on either, and they weren't maxed out. One was paid off.

It makes me sad since I'd been working on gaining a better score. I didn't have bad credit, just hadn't established any.

What a waste of time.

@friendlynerd: I think it depends as much on the creditor (probably more) as it does on you.

@Blueskylaw: There will be no case. One thing is they don't work for us, they work for the lenders. The information in the reports is correct. The score is just a statistical prediction of the chances of you being 90 days late on a payment. The prediction they will say is still valid.

The banks take this number and hopefully with other information, decide if and how much they will lend you.

not sure why i should care. I'm currently working on reducing my credit card totals and won't be selling my house (and buying a new one) for a few years, or a new car.

Amex axed my costco card (then credited my rebate to the damn card after it was already paid off). so I'm sure my rating went down from that but to hell with it.

@friendlynerd: Just happened to me last week. The funny thing was one of the reasons stated in the letter: too few accounts with a history longer than 2 years. I've had all of my credit cards since the early 90s, so I have no idea what the hell they're talking about. If they're dinging me because of the banks that I originally opened the accounts with have been consolidated into new entities, well that's just evil. They wouldn't do that, would they?

"no fault of their own"

If you don't carry a balance, you won't see any changes.

@wcnghj: This makes absolutely no sense. There have been numerous articles and stories by consumers and the media stating that credit card companies are slashing the limits of people who have pristine payment records. Just because you don't carry a balance doesn't mean you're immune from this.

@friendlynerd: Mine too. I'm knocking on wood (or at least the wood imitation that is my cubicle desk).

@twophrasebark: There are still people who have real low utilization, their score would need to stay where it is, or should their score go up HIGHER because it stayed the same, even though there risk hasn't changed. How does Fair Isac reflect that without lowering scores of the higher utilization.

One of my credit cards slashed my limit from $10k to $5k under the guise of "delinquent activity" on my credit report. I had just bought a new car a few months before and been told I had excellent credit, so I quickly checked my credit report to make sure there was nothing fishy on there. Nope, everything looked good. I can only assume it's because I don't carry a balance and they want to limit their liability, as previous posters have stated.

Haven't had my credit limit cut on either of my cards. I've been expecting it, but it has not happened (yet).

Hubby had it happen to one of his cards, though. Went from $50K down to $25K. He actually was kind of pleased. Card never has had any more than $2K on it anyway. He wasn't too worried about his credit score. It's pretty high anyway, so he felt he could take a hit and still be okay.

@HiPwr: That probably won't lower your score, since your percentage balance is 0%, well below 50%.

@craptastico: This was a few years ago, but one of my cards went from "free, zero maintenence, zero monthly fee" to something ridiculous like 15 dollars yearly maintenence fee + 5 dollars a month minimum service charge.

I (and they) knew that cancelling that card would hurt my credit score. It felt like extortion. "Nice credit utilization and score. 'Shame if something were to happen to it, if you know what I mean..."

@friendlynerd: My limits on one of my cards was recently increased and the other hasn't been lowered even though I am unemployed for about 6 months. Of course I haven't told them!

One reason is I have been able to keep payments at least a few hundred above minimum by drawing off a cushion. The other is I only have two accounts and so I use them more, and they only see two accounts with balances.

Strangely enough, the limit just went up on one of my cards, most likely due to the fact that I'm nearly paid off on all of my credit card balances after nearly 5 years of debt hell.

@TheNerd: Answer: Remember who the FICO is for - not the consumers benefit.

I think someone will successfully make the argument that this is collusion on a massive scale in order to artificially raise interest rates on everyone (and thus make more money) due to them taking action that affects the credit score of their customers.

@pecan 3.14159265: ^ Exhibit A

Thanks Chase :o)

Luckily my other cards weren't affected, but it still pisses me off that Chase had the money to buy out my former bank (along with others), but not enough to extend credit which is actually what their business is.

@Blueskylaw: I agree, in fact, I think the next logical step would be to either standardize the whole process or mandate that creditors/lenders publish the scores and which scoring system they use before you apply for credit.

No more of the car ads saying "extremely high will qualify" for those teaser rates, it needs to state the score. There is too much secrecy in the market - you apply for a mortgage with what you think is a good score, and then the broker comes back at closing with "we use this other scoring system which gives you a bad mark for that collection you had 15 years ago yadayada you need a subprime loan....sorry."

Those kind of practices should be outlawed. If you know the scoring system going in, and know your score, then there shouldn't be those kind of shenanigans going on.

@Oranges w/ Cheese - now with 50% more kitty!: exactly. i don't care too much about the exact score, but it's nice to be able to keep general track of it, and it's nice to see what exactly is wrong with your credit if it's not as high as you think it should be.

@TheNerd: Who is "we"? Ya really can't tell the banks how to evaluate credit.

One thing to point out though, is that the scoring system making it easy for banks to evaluate someone has been a reason given for how banks are able to be secure in their lending. Without the FICO system many of us would never have been giving these credit cards in the first place. Lenders are being more conservative anyway, so whatever they do to the score, the effect might not be much better. They are looking real hard at us

SacraBos, I don't think that argument will be successful, collusion needs to be proven pretty hard. This is more an unintended consequence.

The focus should be on two fronts. 1- Is the Fico score accurate as far a predicting defaults? and 2- Should banks minimize the importance of the scores in thier decision making process?

The BEST thing about being a trust fund brat, is that I never, ever, ever, have to give a tinkers damn about my credit score again. In fact, I'm going to go out of my way to see how BAD I can make it. freecreditreport.scam
Lulz.

@twophrasebark: I agree it seems as if the need to re-re-evaluate the scoring system since it's fairly common knowledge that the credit card companies are slashing available credit for any and no reason what so ever. (AKA We're taking our ball and going home since you're making us play fair[er] next year)

Fannie Mae and Freddy Mac buy the mortgages from banks, so they set the standards that most banks adhere to. One thing that could be done is to ask them to re-evaluate the scores or to develope a model that takes income into account income, with utilization being severly minimized. A case would have to be made that it was an accurate prediction model.

This would help with mortgages at least and apparently the scores weren't very helpful in predicting who defaulted, so there scoring system needs a hard look anyway.

I have an opposite story to tell. I noticed that my Chase Visa was an "old" one ("old" being that it wasn't getting any rewards, like cash back). It had a $2,000 credit limit on it.

I then was told by Chase that I could apply for a "Visa Signature" card a few months ago, which gets cash rewards, so I did. Unfortunately, the CSR over the phone didn't hear that I was already a Visa card holder. So, I got a new Visa Signature card (with a new card number) with a $5,225 credit limit.

I called Chase up and advised them I already was a Visa card holder. The CSR immediately apologized, told me not to use or confirm the card and he would send me a new Visa Signature card with my old card number.

It arrived a few days later, with a $7,225 ($2,000 + $5,225) credit limit. This made my day.

chase just recently cut my limit by a whopping $100. one hundred.

I feel pretty much helpless against the things the CC companies decide to do at this point. we're just paying down the debt, not incurring new and hoping for the best.

BoA and Chase have both cut my credit limits and keep doing so, to just above what my balance is. No big deal, because I've also opted out of rate increases so I can't use the cards anyway.

And, on a more surreal note, Citibank just informed me that they're raising my 5.99% fixed rate card to a prime + 21.99% variable rate card. Not surreal, you say? Wait for it .... 2 years ago, they closed this card without my consent and I'm just paying the balance. And the way the notice is worded, if I do not call to opt out, they will be raising my interest rate on a closed card.

I wonder how many people are just going to throw that notice away or chuck it in a drawer thinking, "Hey, my account is closed so this doesn't matter."

Bastards.

Citi also owns my JCPenney and Shell cards, both of which keep having their credit limits raised, probably because they're low risk cards. But still... it makes no sense unless they're just trying to distract me with increases in the hopes I won't notice them stealing my wallet.

And I say again.... Bastards.

@Oranges w/ Cheese - now with 50% more kitty!: I like being able to get free reports on what's showing up. Granted, you can't see any details, but as an example it showed me when my recent mortgage started showing up in the records (since it'll break down your debt by categories).

@PunditGuy: did you make sure no credit cards were opened in your name by someone else?

@PinkBox: Don't worry, your score isn't the end all and be all number that so many people make it out to be.

True you might have to pay a slight bit higher for a car or house but you will still be able to GET that car or house.

Or you can just really stick it to the man and pay cash.