Capitol One Stops Harming Customers' Credit Scores, Starts Reporting Credit Limits

Capital One will start reporting cardholder credit limits to the three credit bureaus, a common practice from which most cardholders had no idea their creditor abstained. Credit limits help TransUnion, Experian and Equifax determine credit utilization, which accounts for 30% of a credit score. Capital One’s decision, which will take effect by the end of the year, will likely boost its cardholders’ credit scores. From the Washington Post:

Utilization basically boils down to this: If you’ve got a card with a $5,000 credit limit and you’re carrying a $4,750 balance, you’ve got a 95 percent utilization rate. FICO’s scoring system — which runs from 300 to about 850 — subtracts points for high ratios. The rationale is that people who are maxing out their cards are perceived as riskier and more likely to fall behind on payments.

On the other hand, say you’re carrying a $500 balance on that same card — a 10 percent utilization rate. The FICO system rewards you with extra points because of your moderate and responsible use of available credit.

When a creditor withholds or neglects to report your limit, the FICO software cannot compute a utilization ratio. Typically, it either doesn’t use that credit line to compute the score or substitutes your highest reported balance on the account for your actual limit.

The end of one secretive and harmful practice makes you wonder what else they might be hiding from their cardholders.

A Boost for Credit Scores [Washington Post]
(Photo: garibaldi)


Edit Your Comment

  1. levenhopper says:

    So if you have a lot of unused credit, it’s good, right? Or is it the other way around?

    On a different note, I wonder how that IRS test they just failed would do at banking call centers…

  2. j-o-h-n says:

    @levenhopper: As far as your FICO score is concerned, the smaller this ratio: credit-in-use / credit-available :is the better.

    Note that paying off your credit cards in full every month does not mean that ‘credit-is-use’ is zero — they just do a snapshot of your account on some random day.

  3. castlecraver says:

    @j-o-h-n: I believe it’s actually avg. daily balance.

  4. j-o-h-n says:

    This page []
    says it is likely whatever amount was on your last invoice.
    (So I suppose you could check your balance online a week or so before your closing date and send a check then so your balance is zero when they run the statement — which seems like a lot of effort for probably little gain)

  5. SOhp101 says:

    @j-o-h-n: Actually that’s not true. Most credit card companies take the end of statement balance and use that as your utilized credit. I’ve checked my credit score quite a few times and all my credit cards do this.

    @levenhopper: The rule of thumb is keep your credit utilization below 30% and you’re fine.

    There’s still no way in hell I would EVER get a Capital One. Ever tried to get a customer service rep on the phone? I’ve seen my friend attempt that; it took him yelling at the automated prompts for 5 minutes, then he was given the runaround by several reps before finally reaching one that said “sorry I have no idea how to solve your problem.”

    and I thought Citibank giving me a rep in India was bad…

  6. SOhp101 says:

    Correct what I said, j-o-h-n, for some reason I read your comment as end of balance, we’re both saying the same thing.

  7. JustAGuy2 says:


    It’s a Goldilocks thing – having a low utilization is a good thing, but having too much available credit is a bad thing (you could go on a spending spree).

  8. castlecraver says:

    @j-o-h-n: Sorry, yup… you’re right. I must have been thinking about APR calculation.

  9. fluiddruid says:

    Well, this was the #1 reason I’ve never gotten a Capitol One card. If they can fix their massive customer service issues, and stop sending people 10 card offers a week, they might be in business for my business.

    (Yes, they really completely overdo the credit card offers. I did get about 10 per week from them – yes, more than one per day – until I opted out of sharing my credit report with potential creditors. Never actually had a card, though.)

  10. Crazytree says:

    Capital One is BY FAR the best card to use for traveling, as they don’t rip you off with FOREX fees.

    This compromise was the result of several multi-state class action suits.

  11. Helvetian says:

    I love CapOne, nothing but excellent service and treatment for several years. I love my no-fee 4.90% Fixed Visa Platinum, never had a single problem with them.

  12. digitalgimpus says:

    I was going to cancel the card for this reason (only kept the account open, but unused and 0 balance since it’s my oldest card). I guess I’ll leave it open for a little while longer and see.

  13. smbriones says:

    I was just wondering, what if you have a low credit limit, like $500? Would the fact that they report that you have a low limit hurt your score instead of improve it? I have a Capital One card, my first and only card, and it has helped my credit so far, but I’m a little worried that reporting my low credit limit will hurt me. Does anyone know the answer to this? Thanks.

  14. mac-phisto says:

    meh. either way, i love my cap1 card. no transaction fees on balance transfers, no forex (like crazytree stated), plus i just got an amendment to the t&c on late fee changes: it was 3 pages in large, bold writing with pictures that a 4 year old could read & comprehend. that opposed to the little slip of paper boa sent me with type 8 font size telling me my minimum payment may or may not change (i think…i’m still working on the translation).

  15. lore says:

    I have a cap one card with a very low credit limit ($5k) but that was a big deal to me since all of my other card had much higher limits. It was always a sock drawer card EXCEPT for when I traveled abroad. I will be working in Sweden for the next 6 months, so guess which card I’ll start using regularly to avoid foreign exchange and VISA fees? :-)

  16. Mr. Gunn says:

    Amazing. They finally do what they’ve been supposed to, and it only took about a year of browbeating from Congress to make it happen. Now, when’s the last time any of you Crapital One cardholders actually had your limit raised?

  17. 420greg says:

    I am glad they finally decided to start rreporting credit limits. But if they want my business (they must with the amount of offers they send me) they have to stop pulling a tri-merge when you apply.

    I am not going to take three hards to get one of their cards.

    All other CC providers only pull one of your reports. Not all 3.

  18. Helvetian says:

    American Express is notorious for pulling two, when I first applied they hard pulled Equifax and Experience. CapOne only pulled up my TransUnion report.