FICO Confirms: Reduced Credit Lines For Good Borrowers

A study from Fair Isaac confirms that even the best borrowers are seeing their credit lines slashed as banks move to boost profitability during the recession. 16% of Americans have seen their credit lines reduced by an average of $2,200, and of them, 11% had no late payments or negative marks on their credit report.

That may come as a surprise to those consumers because they pay off their balances every month and are careful with their credit, says John Ulzheimer of But at the same time, those customers are also generally less profitable for lenders, he says.

Typically, credit scores tend to remain relatively stable over time, in part because there are a number of factors that go into calculating one’s score. In fact, the banks’ tightening may have spurred some consumers to pay down balances more quickly. Among Fair Isaac’s findings: About 6% of consumers saw their scores jump by 40 points or more (about 4% saw their scores drop by 40 points or more).

So there you have it, straight from the source. It’s not your fault, and you did nothing wrong. You were just too unprofitable for the banks, just the way you should be.

Credit Cuts Befall Even Top Scorers [The Wall Street Journal]
(Photo: yksin)


Edit Your Comment

  1. thetango says:

    I’ve been wondering about this trend for a while now. I’m obviously missing the bigger picture here/being dense ;).

    How does reducing the amount of available credit affect a credit card company’s bottom line? If I’m not using it, how am I costing a credit card company money?

    • HenryES says:

      They reserve for losses on unfunded commitments(the amount of your credit limit you have available), so if the the commitments are lower, the less they reserve.

    • Blueskylaw says:


      They will give that extra credit to someone who pays their bill on time, carries a balance, but might be nearing their charging limit.

    • Richard Brown says:

      @thetango: What they are referring to is the bigger picture.. they are trying to cut the bottom line figure they have that shows how much credit is available. The more they have available the more they can give to someone who is going to charge that new boat to their card and still pay it off.. It’s all about the bottom line number.. Take from the poor and give to the rich.. it sux…

      • trujunglist says:

        @Richard Brown:

        Huh? To me, this is a take from the rich (those that have high credit lines and can pay their balances) and give to the… no one…
        It would actually be more profitable to go after poor people, assuming that they’re poor but still able and willing to pay their credit card bill, because they’re more likely to carry a balance, not make minimum payments, etc…

    • crashfrog says:

      @thetango: The line of credit they’ve promised you constitutes a liability – because you could draw on it at any time, and then potentially not pay it off.

      Reducing your credit reduces their liability.

  2. pollyannacowgirl says:

    Damned if you do, damned if you don’t. You just cannot win.

    Maybe I’m just stupid, but I am caring less and less about my “credit report”. I used to have “perfect” credit and now I don’t. I’m tired of jumping through hoops and playing by these increasingly irrational rules. If you check your credit “too often”, it lowers your score. WTF? What does THAT have to do with anything? Ridiculous.

    There needs to be a reward for good behavior and a punishment for bad behavior.

    • WachoviaEmployee says:

      @thetango: See GAAP standards. It’s a liability on their balance sheet.

    • madanthony says:


      You checking your own credit does not lower your score. Other people checking your credit does, because it shows that you are applying for credit and may soon have more liabilities.

      • Keavy_Rain says:

        @madanthony: Speaking of which, I had a friend of mine lose a car loan over that.

        Here’s how it went down: Friend goes to dealership, finds car she likes, makes down payment, finance guy takes her info, gives her an interest rate and down payment based on her credit score and down payment, she drives off thinking all is well.

        A week later she gets a call from the dealership, who wants the car back because they can’t finance her. Seems that submitting her loan application to every bank and financier they do business with in the span of a few days FUBAR’d her credit rating. As a result, no one would take the loan.

        She bitched, moaned, whined, and complained but eventually gave the car back when she ran out of options.

        • Keavy_Rain says:

          @Keavy_Rain: Should read “gives her an interest rate and monthly payment based on her credit score and down payment”

          Don’t post when you’re tired, especially if the site lacks an edit button.

        • mac-phisto says:

          @Keavy_Rain: there are a bunch of possibilities for what actually happened here & being on the outside, it’s difficult to figure out what is actually the issue. but here’s some things to consider:

          1) are you sure your friend just didn’t have the credit to finance the car? i put this at #1 because many people are completely ignorant about their credit/credit score. i deal with people all the time that are all “i have pretty good credit, last time i checked it was a 540”. yeeeaaaah…maybe this ’09 5-series is a little out of your league right now. everyone’s quick to blame someone else when in reality it’s the 16 collection accounts, 2 repos & 5 civil judgments that are polluting the score, not the credit pulls.

          2) if this is recent (like, within the past 6 mos.), it’s possible that the financier had trouble securing financing b/c many lenders were simply unable to provide it – even to people with the best credit. it’s certainly possible that the auto banker was working with outdated numbers when he drew up his quote. perhaps he could provide her with financing, but it was going to be at a higher rate with higher monthly payments & a higher down payment & she wasn’t prepared for that contingency.

          3) pulls are normally categorized by type (auto loan, home loan, credit account). hard pulls within a short period are supposed to be categorized together with the rationale that person X isn’t buying 20 cars, just shopping at 20 places to buy 1 car. so, you’re supposed to take the score hit once. however, it doesn’t always work like that.

          banks typically use credit report vendors that offer volume discounts to their clients & some have built their discount around a “pull by type” methodology. what does this mean? it means if my bank’s primarily need for credit reports is for “home loans”, it’s quite possible that my credit report vendor is categorizing all my pulls as “home loans” to reduce their cost/pull (& pass some of that savings on to me).

          PLEASE NOTE: THIS NEXT SECTION IS SPECULATIVE IN NATURE. i CANNOT provide evidence to back up my claims, but IT IS based on industry-specific knowledge & experience.

          this is where “hard pull spam” COULD really hurt a person’s score. instead of “auto loan, auto loan, auto loan, auto loan, auto loan, auto loan, auto loan” for -40pts., the CRA sees “auto loan, home loan, credit line, auto loan, auto loan, credit line, home loan” (3 different type codes) for -120pts.

          this is why i recommend that people secure financing before they shop. find a local credit union for a good rate, or visit the bank where you do the majority of your business. know where you stand & have the money in hand, then hit the car lots.

          /ramblings of an insomniac

          • David in Brasil says:

            @mac-phisto: You seem to have a good knowledge of the subject, so I have a question that maybe you or someone else can answer: How can the car dealer repossess the car simply because they can’t sell the financing? Does the sales contract have a clause that says that the sale is contingent on the dealer obtaining financing? It would seem to me that we have a sale here, and the dealer’s inability to turn around and sell that debt is their problem, not the consumer’s.


            • thebluepill says:

              @David in Brasil:

              Yes, If I recall from the last time i bought a car there was a clause that they must secure financing that you do sign as part of the paper work.

            • econobiker says:

              @David in Brasil: It is called “spot delivery” and some dealers used to be notorious (Bill Heard) for doing it to the poorest credit risk people and then calling them back asking for more money and not being able to give their trade in back.

  3. Intertrode says:

    I’ve had my credit lines increased on a couple cards. Does that make me bad?

    • Nighthawke says:

      @Intertrode: Same here, even the most miserly of them all, Discover jacked mine up another $100. Being below the radar as a sub-$50K blue collar IT tech is making my money seem more stable I guess…

      • MadameX says:

        @Nighthawke: I’ve had the same experience, and one of them raised my limit by a pretty big number (about 30% of my initial limit, which was not small).

        By all accounts, though, I sometimes carry a balance here and there (i.e. I might pay something off over 2 or 3 months instead of at the end of the month). Hence, they are making a few bucks off of me in interest payments. Therefore, I am the kind of customer they want to keep.

    • Triterion says:

      @Intertrode: They also raised my limits. I’ve never considered myself the highest tier of consumer, as I’m only 25, but I guess they’ve lowered their standards!

  4. NotYou007 says:

    Well I have the opposite problem. Capital One keeps increasing my credit line and I haven’t even asked for an increase. HSBC also raised my limit without me asking and I still have a kick ass 9.9% APR with them.

    • Richard Brown says:

      @NotYou007: LoL that’s what you think.. check again because 5 minutes after you posted that its now at 29.99% Mmmmm… exciting :)

      • NotYou007 says:

        @Richard Brown:

        It’s ok even if they do. I’m paying off the card this week but they might turn around and jack up my APR for not carrying a balance.

        • SadSam says:


          It might be a problem if you have to much available credit. You can always ask them to lower your credit limit which is what we do (we don’t use our credit cards except for travel) when they up our credit limits.

          • johnva says:

            @SadSam: It’s usually not a problem to have too much available credit. In fact, it helps your credit score by lowering your utilization. The only time it could be a problem is if a mortgage underwriter tells you you have too much available credit, in which case you could simply offer to have to reduced at that time.

    • johnva says:

      @NotYou007: It’s not really a problem if they’re raising your credit lines.

  5. aguacarbonica says:

    Does that mean that a graduating senior with little credit history would be better off opening a credit account at this time or worse of? Do I seem more profitable (more of a sucker)? I think I need a credit card but I’m scared to apply.

    • NotYou007 says:

      @aguacarbonica: The question is do you really need a credit card? I did not get my first CC until I was 26 as I had no need for one. I had established my credit rating though via a car loan many years prior. There are a lot of others ways to establish good credit other than go down the credit card road but being I’m a computer expert I won’t try to give you advice on the best way to establish good credit.

      • Keat says:

        @NotYou007: I don’t know what I would do without a credit card. It’s the safest way to buy online and the safest way to buy big-ticket items.

        • NotYou007 says:


          Well in 1996 not many people where making purchases online. Even Amazon was a very new company back then. As for making a big ticket purchase a person with no or very limited credit is only going to get a CC with a very small limit, around 500 if they are lucky.

    • Brittany Stewart says:


      I applied (and got approved) for my only credit card when I turned 18. I’m now almost 21. I don’t think there’s any harm in you applying for a card and using it wisely.

      My problem was that I saw it as free money and I could just pay back my debt whenever I felt like it. (I was young and had NO idea about finances at all.) If you buy something, make sure that you can afford it with cash first. If you can’t buy that $3k entertainment system out of your own pocket, you don’t need to buy it with credit.

    • Eyebrows McGee (now with double the baby!) says:

      @aguacarbonica: I got one when I was your age so I could order school books online and have amazon ship them to my dorm (pedestrian-only campus, and those books are heavy!). Paid it off right away. Used it just twice a year at first for that kind of thing.

      I’m 31 now, I’ve only carried a balance once — the month I got married. I was a little distracted. :)

    • Charles Duffy says:

      @aguacarbonica: Go ahead and get the card. I had quite a bit of trouble the first time I tried to buy a house on account of lack of credit history — what little I had was pristine, but it wasn’t enough for lenders to go off of.

      Just be judicious about how you use it.

    • Oranges w/ Cheese says:

      @aguacarbonica: Go for it – Get a credit card, buy gas with it, and pay it off each month.

      I had a credit card for 6 months and when they pulled my credit score when I went to buy a car, I had a 600 some score. Now its in the 700’s.

      The only reason to be scared of credit is if you know you’re going to be irresponsible with it.

  6. madanthony says:

    The headline seems a little overdramatic given the the stats cited in the article. I suck at math, but if 16% of Americans have had their credit lines cut, and 11% of that 16% had no negatives on their credit reports, doesn’t that mean the number of people who have good credit but still had their credit reports cut is ~1.6% of the population – which isn’t exactly a huge group.

  7. jblack says:

    I suspect they’re not hitting everyone yet.

    With 32K of income, $130k owed on my home (no idea of it’s worth), no other debt and 800+ credit rating and $17K of credit card availability, I was able to get a new $9k card in the space of 2 minutes on this past Friday.

    Maybe they’re hitting people with negative equity on their homes?

    • usa_gatekeeper says:

      @jblack: I imagine zip codes, i.e. those representing high percentage of defaults, foreclosures, etc., still have some effect on ease of getting new credit and having existing lines reduced – even for those with perfect credit.

      That ~1.6% mentioned above just might happen to live in the wrong zip codes.

      • bohemian says:

        @usa_gatekeeper: Our car insurance was cut in half when we moved. Living in the crappy part of town jacks your insurance rates. I can see how a credit extending bank might use your location in such a manner. For the record I don’t agree with doing so.

        • usa_gatekeeper says:

          @bohemian: bohemian, I wasn’t so much referring to so-called redlined zip codes (the existence of which many agencies deny), but was referring more to large areas of zip codes in, e.g., California, Florida, Michigan, etc. – the hard hit regions.

      • mac-phisto says:

        @usa_gatekeeper: which would be interesting, b/c it’s pretty much the textbook definition of redlining, a practice that’s supposed to be illegal, but is widely used in the credit card industry (i’m looking at you, AMEX).

        holy run-on, batman!

    • hegemonyhog says:

      @u1itn0w2day: I just paid off a huge chunk on a credit card…and got the limit reduced by that chunk based on “a review of my credit history”. Having never missed a payment on any card, the review was done in the four hours between my payment being processed…and lunch.

    • Oranges w/ Cheese says:

      @jblack: Here’s a question, as I’m looking to maybe buy a house – with $32k HOW THE HELL are you affording payments on a $130k house? I’ve done the math and the best I can hope to pay is somewhere in the neighborhood of a $70k home…

  8. albear says:

    Keeping your FICO up to the best possible terms is awesome! We qualified for a 30 year mortgage to buy a home at the record rate super low 30 year mortgage at 4.75%! We have a 807 and an 804 FICO. No debts at all too.

  9. ajlei says:

    I was a little worried when I recently got a letter from my bank in the mail, but it was just to tell me that they were raising my credit limit. So.. I guess I must be that profitable sucker they’re looking for.

    ..I swear I’ll pay off my textbooks/etc. purchases soon!

  10. Jenkinsbball says:

    Funny, I just had my limit raised to $2,200.

  11. kwsventures says:

    Having a big credit card limit is too dangerous for most people. They lack the discipline to handle it. Any person that can’t payoff their credit card balance each month has some kind of financial problems. Those problems may be only temporary. But the current credit card mess doesn’t apply to those folks.

  12. bohemian says:

    I am still trying to figure out how one private company gets collect your data and determine your credit worthiness and has no government regulation upon it.

    One would think there would at least be a method to see your file or challenge your FICO if you disagree or find errors. Nobody even knows exactly how they determine your score.

  13. Onion_Volcano says:

    Happened to me. You ever try to buy international plane tickets when your $4,000 limit credit card is now $800? Yeah…

    • Anonymous says:


      I’m in the same position – good credit, no balance, and had my credit card slashed. I will have to pay for my international airfare with my debit card I guess. I have never paid for a plane ticket with cash rather than a credit card, guess it’s time to start.

  14. nucwin83 says:

    Rebuilding my credit right now. 622 and 676 FICO scores, pay off the card every month and yet it just got upped by 30% this past week.

    I guess they figure I’m more likely to make them money by overspending?

    Oh, now I can get that extra Mac I want…

  15. ShadowFalls says:

    The interesting concept of all this? They reduce the credit of a person who is responsible and paying down their card. These people by using their card was still making them money.

    When their credit limit gets reduced, many either stop using the card or cancel it out of spite. This ends up with the credit card company making absolutely nothing and thus they just lost everything they got from that person.

    • jersey636 says:


      Exactly! I told Capital One lately to eat it when they told me they were raising my rate. Now If I were to pay off my $1000 balance tomrorow they would make nothing on me, and then loose me forever once the account closes out, so that change me racking up up another balance is not going to happen so in the end like you said, there loosing future business.

  16. diasdiem says:

    This all stinks to high heaven. Banks issue credit cards. They reduce the credit limit of people who pay their balances (and hence are unprofitable). This limits their available credit, which damages their credit score. So when these unprofitable people need to make a major purchase and go to the bank to get a loan, they get one for a larger interest rate than they otherwise might have gotten, and end up paying more in interest.

    Couldn’t you argue that unduly lowering your credit limit is a form of slander or defamation? It says to other lenders that you’re not as credit-worthy as you really are. It can even affect your ability to get a job, or a good apartment.

    • TouchMyMonkey says:

      @diasdiem: I have a zero balance and a FICO score in the 830 range. I guess that’s what you get for a good credit history that goes back three decades. My message for you younger people is that you don’t get to start out with 800?+. You earn that over a long period of time. I believe Mike Myers did a bit in SNL back in the days called “Middle Age Man” where he played a guy of a certain age who was a financial superman because he knew how money worked and played the system like a Stradivarius. Check it out on YouTube.

      • diasdiem says:

        @HurtsSoGood: I’m talking about people who already have good credit scores, have been doing everything right, and get their credit limits cut anyway. This lowers their score, which they don’t deserve. I don’t know how much a hit you would take, but if it’s enough to make a lender offer you a loan at even a slightly higher rate than you would otherwise get, it costs you money. A difference of a percentage point on a mortgage is several thousand dollars.

        If you’re getting a loan from the same bank that issued you the card, it’s like they deliberately lower your credit to justify charging you higher interest on your loan to make up the money they aren’t making in credit card interest. And if you’re getting a loan with another institution, it’s like that bank is telling every other lender that you’re not as credit-worthy as you really are. It’s like looking for a job and having your old employer tell your prospective employers that you aren’t reliable despite having an exemplary employment record.

  17. KHook321 says:

    Surprisingly, my Grandma just recently had her credit line cut by over $1000. The reason this is surprising is that she is seemingly their perfect customer. She has a high income and pays her bills on time, yet she always carries a balance. So the CC company gets their money while still making some interest too. You’d think they wouldn’t cut the credit line of a customer like that.

  18. u1itn0w2day says:

    This is just as bad and jacking someone’s APR to 30% with a good history or like being a day late .

    I thought the more months you paid interest the more the credit card company makes . So if you have a higher limit in theory you’ll be making payments longer . Samething with a lower APR ,the lower it is the longer you are likely let the balance run .

    How about giving a customer positve incentive to pay off their balances rather than doubling the interest rate . Or how about giving a customer a credit line that they seem to be OK with rather than shrinking and running the risk of running into credit limit increase fees which increase the customers payment .

    It’s like the credit card companies are having trouble rigging the game right now so they not only do not know what to do it’s like they want all the players to quit who don’t play by their rules . Except they’re going to wind up loosing players and money in their game of gouge the customer .

  19. jersey636 says:

    The whole credit score system is a big mess up period. You can pay your bills on time, pay off cards, pay more then minimun all this nonsense and half the time you won’t see any change in your credit score, if anything it might go down. Years ago it was basic idea that if you paid on time and paid them off you would see your score go up alot, now with the new system its all wacked out. I got so tired of trying ways to get mine to go up that I just gave up and started paying bills one minimun at a time, and don’t even bother paying them off lol.

  20. Sudonum says:

    Amex gave me a Platinum in December. In February HSBC droped me from a $10k limit to $300. I had the account for over ten years, ran a balance at times, but not in the last couple years. I canceled the account, told them that I had no need for a card with a $300 limit and that it was insulting to have them lower the limit like that after a 10 year history with no negatives. Screw ’em.

    • jblack says:


      I’ve heard rumors that Amex is having serious liquidity problems and is cutting any availability they can.

      Ironically, when considered the effects to you if they had outright closed the account to you (age of account, mark on record for losed by company), they may have been trying to do you a favor by cutting you to $300.

      • TouchMyMonkey says:

        @jblack: It was HSBC, not Amex. Anyway, Capital One recently tried to jack up my rate to 17.9%, which I found insulting considering my credit score is >830 and I haven’t had a late payment since the Reagan administration. Needless to say, I shredded their card. Fuck them.

        • normyk says:

          @HurtsSoGood: I have one balance I’m working on whittling down so last time a card tried to jack my rate I used one of their transfer offers (the kind where you get the rate until it’s paid off) to move the balance to them at something like 1.9 percent. I had to pay a fee to do so, but it sure felt like I was spitting in their eye.

          I’m still waiting for them to cut my limit.

  21. lonestarbl says:

    Strange… I just went into my Chase account today… and my credit limit was INCREASED by $3k

    • Corporate-Shill says:


      Same sheit here, except my increase was $4k, happened in January, and the card was issued by a local credit union (processed through Chase).

      What is weird is my normal monthly average purchase is about $1k. I always pay off the charges every month. My single largest monthly purchase in recent history was about $3900 and my credit limit is $45k.

      So they farking increased my credit limit to $49k.

      Why? It is a personal card. I ain’t going to buy enough to even get close to the old limit so why increase the limit.

      My guess is the bank (either Chase or the local CU) is trying to demonstrate their efforts to increase the lines of credit to their customers. So they increase the lines of credit to people who won’t use it and if they do use it are most likely to pay if off immediately.

      What a waste.

      • Corporate-Shill says:


        The large local (regional) bank has been calling and doing mailings since late January asking if I need a loan or want my CC limits increased.

        Don’t they think if I needed a loan I would ask for a loan?

        I strongly suspect this is their effort to “increse leading” without actually increasing any lending. They know I am going to turn them down, so it is a safe offer. And they can tell Uncle Stupid that they have made an effort to lend $ but nobody wanted to borrow any $.

        • Corporate-Shill says:


          PS: The calls/mailings are for my business. Not personal. The only loan outstanding at this time is a building mortgage…. and that has been paid down to about 1/2 of the original loan.

      • lonestarbl says:

        @Corporate-Shill: I actually went in to double-check I was getting the axe like so many others. My story is pretty much identical to yours. My last big charge was a down payment on a new car (Goooooooo economy!) and that kept me under $4k for the month. Now I am house shopping as well. I’m doing my part to stimulate the economy and cash in at the same time, dealz are out there if you have been smart with your finances!

  22. ceejeemcbeegee is not here says:

    @aguacarbonica: There is nothing wrong with getting a credit card and using to wisely. Meaning, if you put something on the card, do not carry a balance and pay it off each month. If you do not earn enough nor have the will power to do so, stick to debit/check cards.

    I believe everyone should have an emergency credit card. And by “emergency” I mean, someone close to you is very sick/has died and you need to fly across the country asap and the funeral home won’t bury your grandma ’til you pay for the extra limo but the bank needs a death certificate to release your deceased relatives funds or something. Not that I’m speaking from experience or anything.

    • NotYou007 says:

      @ceejeemcbeegee… twitterin’ and tumblr-in’:

      So a person with limited credit gets a CC and they will have a very low limit. As I said before, at least 500 or less. That will not get you far in an emergency much less get you a plane ticket if you have to travel far.

      I know this first hand as my mother passed away Jan 18th from cancer and she went down hill fast and a round trip ticket was over 1300 dollars with that said how do you obtain a higher limit if you continue to pay off the card each month?

      Unless things have changed you will not build a postive credit record if you pay off the card every month. They are not going to raise you rate if you keep paying off the card. They make nothing off of you and it does not prove you have the ability to make a monthly payment. It only proves you can pay off the balance each month and that does not show you are credit worthy.

      I was taught back in the late 80’s to build credit you must show you can make payments on time every month for at least a year. Yes, the make money but it shows you are a credit worthy because you can make a payment on time.

      This non-sense of paying off the credit card every month for someone that has no credit history or very limited credit history sounds just dumb to me. If you have well established credit then go ahead but to tell someone just starting out to pay it off each month in my opinion will not improve their credit score and is dumb.

      • pecan 3.14159265 says:

        @NotYou007: Yes you will build a credit record if you pay it off each month because you also need a solid credit history. If you don’t have history of credit, you are less likely to get the good rates. The late 80s are obviously not like current times – paying off your monthly bill is a must in order to ensure you won’t be digging yourself deeper, especially if you’re young or have a low limit.

        I got my first card at 18, it got paid every month on time, in full. I have an impeccable credit record because I was never late, and maintained a long history.

      • Eyebrows McGee (now with double the baby!) says:

        @NotYou007: “So a person with limited credit gets a CC and they will have a very low limit. As I said before, at least 500 or less. That will not get you far in an emergency much less get you a plane ticket if you have to travel far.”

        $500 covers an awful lot of emergency car repairs, though, as I know from firsthand experience.

        “how do you obtain a higher limit if you continue to pay off the card each month? Unless things have changed you will not build a postive credit record if you pay off the card every month.”

        Yes, you DO build a positive credit record paying off the card every month. That was my ENTIRE credit history until I was 24 and carried my first balance (I didn’t even have student loans or utilities or anything on there until I was 22).

        And they just give you a higher limit. I started with a card with a $750 limit. All through college I never charged more than $300 on it at a time, always paid it off, used it about three times a year, and graduated with around a $3500 limit on that card. When I got married I basically quit using it, and they kept upping my limit, presumably as an incentive to get me to use it more. My current limit on that $750 starter card is $9500 12 years later … and the only thing I use it for is to charge lunch at the cafeteria twice a month to keep it active during the credit crunch. Before that I hadn’t used it for more than three years.

        I never carry a balance on any of my cards, neither does my husband, and they constantly up our limits.

      • Shrew2u says:

        @NotYou007: Pull your credit report and look at it. It lists the following information for your credit card accounts:

        Account Type (joint or individual)
        Date Opened
        Date Closed (if applicable)
        High Balance
        Current Balance
        Basic Payment History (OK / 30 / 60 / 90 / 120) for the last 2 or so years of the account
        Current Status (charge-off, paid or paying as agreed, etc., as applicable)

        There is nothing in the credit report that says “this person always pays off the entire balance – hit the FICO score”. Your FICO score is calculated using a combination of factors – among them, the average age of your accounts, the mix of your account types (revolving, home, auto, other), your utilization rate, number of hard pulls, etc.

        Whether you carry a balance is only important when calculating the utilization rate. Less than 30% utilization (including 0% utilization) is ideal and will receive the highest FICO scoring for that element. Showing 0% utilization by way of spending and paying off the balance every month is not achievable 100% of the time, though.

        Here’s why: when a FICO score is being calculated, the data being used at that point in time may be from a period after a CC purchase is made but before a CC balance is paid off for the month. It is entirely possible to a FICO to go down a few points if a person who has (and pays off) 1 CC each month has an 80% utilization rate at the point in time of the pull, just because the pull was down prior to the balance being paid that month.

        That’s why any credit expert would recommend getting all balances down below 30% and not spending more than 10% of total available credit during any one month if one is looking to buy a home/auto or open another line of credit in the near future, even if all balances are paid off monthly.

        That said, teaching an 18-year-old to use credit responsibly through opening a CC account and only spending what can be paid off monthly is by no means “dumb”. To wit, it should be the standard advice for any young adult – as should providing fact-based information about how a FICO score is calculated, how lenders use a FICO score, how to decipher and dispute items on a credit report, and other credit-related issues.

      • trujunglist says:

        @Oranges w/ Cheese:

        I was wondering the same thing… I’m looking into possibly purchasing a condo or something, but even a $100k loan is fairly daunting at my pay grade (I make more than $32k).
        How the hell do you have $17k of credit too? I can literally only get $1k maximum across multiple cards, and it’s been years of on-time payments now.

        • Eyebrows McGee (now with double the baby!) says:

          @trujunglist: That’s very strange, they’ve always upped my credit well past what I use or need, even when I was in school and had NO income.

  23. supergaijin says:

    Banks still have rules to follow. There’s formulas for how much mortgage paper they can have, how much allocated to different types of credits, and the ratio to deposits. Whether or not you use the credit line, it’s still “reserved” on their books and goes into that equation. Given the fact that tons of banks had mortgage paper “hidden” as securities (which were packaged default swaps) that’s now going to be (is already?) counted as mortgage paper, there’s got to be a HUGE percentage of banks that are WAY over the government limits. Sooo, I think this is an effort to balance their types of credit allocations, pass the government “stress test”, and stay solvent.

  24. fredmertz says:

    That’s a classic car salesman scam that has nothing to do with the credit crisis. They do this to suck more money out of you after they assume you’ve fallen in love with the car and they try to strongarm you into believing you can’t just give them the car back.

  25. vermontwriter says:

    I’m one of these people who had my credit limit reduced. In fact, everyone I know had that happen. I don’t want to know what it’s done to my credit score at this point.

    Between that and then HSBC asking us to approve a 10 percent increase to my husband’s “locked-in rate” Teamster card or else they were canceling the account, I’ve had it with the banking industry.

  26. DaoKaioshin says:

    hm what’s a bit unsettling is that i was just offered a credit line more than I made all last quarter. And I’ve been out of college for less than a year.

  27. PLATTWORX says:

    This has been covered in the news since late last year, been on most news casts and spoken about endlessly by Suze Orman on her show.

    Um, what has taken Fair Isaac until now to confirm “even the best borrowers are seeing their credit lines slashed”. Did they just wake up from a nap???

  28. Anonymous says:

    I’d just like to add to the discussion the fact that I recently had my credit limit with my American Express card slashed drastically due to some “negatives” on my credit. Only to find my credit limit on my Discover card increased a week later.
    None of this makes sense. If what credit lenders did made sense, maybe we wouldn’t need to be bailing out all of our banks for millions…

  29. aguacarbonica says:


    Thanks everyone for the replies, but I don’t think I explained myself very well. I’m not afraid of getting a credit card, I’m afraid of getting one in this particular economy. I am trying to figure out whether I am the sort of applicant that would be automatically rejected in a poor economy. I do not want my credit score lowered by multiple attempts to get a credit card if it’s a pretty fat chance I’ll get one at this time.