FICO Needs Credit Limit Reported!

credit limit

American Express Co. shipping receipt, New York City to St. Louis, MO (August 6, 1853) (Photo credit: Wikipedia)

 FICO needs credit limit reported!

If your credit card does not have a set limit to report on each statement submitted to the credit reporting agencies you have a potential problem.  FICO needs a credit limit reported!  FICO’s computers will otherwise assume that the highest balance you ever had represents your limit.

Call and ask for credit limit increases on a regular basis.  Do this even if you don’t really need it.  Ths is a no cost way to improve your debt to available credit ratio.  The best time to ask for a credit limit increase is when you don’t really need it.

FICO’s policy is a 2 edged sword

This policy where FICO needs a credit limit reported can hurt you or help you depending on the circumstances.  If you run up a high bill for a particular month on your American Express card that amount will be reported.  That high amount will become your credit limit to the computers.  If in the future you pay it way down before the statement is closed out for the month it will help your scoring in the very important debt to available credit category.  This is a great way to legally manipulate the system to improve your credit score.  On the other hand if you habitually are near the top number with debt at the statement’s closing you will hurt your debt to available credit score.  The balance when the statement is closed out for the month is what counts.

American Express we’re talking about you

American Express is not a revolving credit card and does not have a specific credit limit. Instead they have what they call a “comfort zone” with each client. The highest balance they have ever reported for you will be considered your credit limit by the credit scoring computer.  It is very important that you determine the closing date for your statement.  This is not the same date as your due date although it is soon after.  Pay your balance down just before the closing date.  This is the figure that is reported to and measured by the credit reporting agencies each month.

Pull your reports and check for the monthly closing date.  If it is a concern because of your pay cycle contact the credit card company‘s customer relations department and ask them if they can change it for you.  Most credit card companies are happy to do that for you.

Before you apply for credit call the customer service department to find out exactly how their policy works.

american express will tell you they have a “comfort zone” with each client that can change either way with time.

 

 

 

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After practicing law for 37 years Edward F. St. Onge, Sr. now devotes all his time to helping consumers achieve a high credit score with amazing speed. Learn the counter-intuitive secrets to credit scoring through his down to earth instructions backed by extensive knowledge of the laws and trends. All of the latest tricks and techniques that they don't want you to know now at your disposal. At last a level playing field for the consumer!

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