Been making your credit card payments on time, careful not to exceed your limit, and been shocked when the credit card company cuts your limit or closes the card without warning?
This is occurring more and more because some companies are getting out of the credit card business or trying to limit risk. Even cardholders with strong (720 +) credit scores are having their limits cut or the account closed if it is inactive.
The impact on your credit score can be devastating. Your credit utilization ratio- the amount of debt you owe divided by your available credit- is responsible for about 30% of your credit score. A consumer could easily see a score drop of over 50 points. Worse yet would be if you were on vacation only to discover you did not have the available credit you were counting on. Cardholders should check on the available credit every billing cycle and read every piece of mail sent by their credit card company even if it appears to be junk.
What should you so if your limit is cut? Call the issuer and see why they did it. It is possible the decision was based on erroneous information from a credit bureau. Ask to speak to a supervisor. Try applying for a credit card where you bank or with your mortgage holder. Credit Unions have a reputation for being more reasonable when it comes to credit cards.
Please let me know about your success or horror stories.
Best, Chip
Chip Allen
Crestline Mortgage Bankers
A Division of Universal Lending Corp
Direct: 303.947.2109
Fax: 303.987.0676
Your Lender for Life!
When people you care about need a mortgage,
for purchase or refinance, please do not keep me a secret.
