Actually, in this case, a limit DOES exist and I am not happy about it.
Yesterday afternoon, I received an e-mail from Credit Card #1 stating they were dropping my credit limit - by $2,000!!!
As you can imagine, I totally flipped out. I immediately called the company and pitched a fit. My main problem with the decision was my new limit ($3,000) only spared me about $200 from maxing the card out. In addition, I've never made a late payment on the card, have paid the balance off before in the past, and used the card actively. So what gives?
The customer service rep told me they had pulled my Experian credit report as part of an "Annual Credit Profile" (which, in the four years I've been with the company, is the first I'm ever hearing of this procedure). Having just pulled my credit report last week, I knew exactly what Experian had reported, and I couldn't see any negative reasons why they should drop my limit that much. The main reason was because my "debt to credit utilization ratio was too high". I know my utilization was a bit high (about 43% - read about it here), but, doesn't knocking my limit down so much make the situation worse since now I'm almost maxed out on one card? Apparently this company doesn't think so.
Other reasons were the length of time my accounts have been opened (nothing to do about that but age) and the amount of my payments (the minimum, right now while on my payment plan) in relation to the balance. Geez. At least I pay my credit cards (and on time, for that matter!).
I had half a mind to tell her to cancel the card right then and there, but then that's not going to help my "length of time accounts have been opened" situation. Instead, I asked her what I could do about it. There are two ways to appeal the decision. The first is to make a large, lump sum payment on the card (not happening, since we're still rebuilding our savings account). The second is to file an appeal based on income. So after work today, I have to run over to the UPS Store and fax over copies of all my assets (savings account, retirement accounts, last paystub) to the company with a request for my credit limit to be restored either to its original amount ($5,000) or another amount. I'm going to ask for my original limit back, but if not, at least increased to $4,000.
The one good thing that came out of this scenario was I'm totally re-motivated now to pay these stupid things off as soon as possible so I never have to deal with a credit card company and their sneaky tactics ever again. Oh, and I found out my FICO score was 709. Still lower than last year by about 30 points, but not as bad as I thought it was.
Anybody else have a similar experience before?
Friday Spending:
$5.97 Dunkin Donuts (breakfast)
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Friday Saved: $0.00
Showing posts with label credit score. Show all posts
Showing posts with label credit score. Show all posts
Friday, April 20, 2012
Tuesday, April 10, 2012
pay it downward
Since the "challenge" portion of the blog has officially ended, I thought I should check into my various cards and see where my balances are at and if I've made any progress. Plus I had to schedule my online payments for the month anyway. Two birds, one stone kind of deal.
Card 1: $2,752.02 (+ $32.51)
Card 2: $2,047.82 (+ $104.85)
Card 3: $409.29 (-123.50)
Card 4: $3,579.61 (-$300.00)
Total debt: $8,788.74
For a difference of $288.14 less than when we started. Blah. That's kind of depressing. But at least I'm under the $9,000 mark.
We get paid this Friday, so I'll be able to throw my credit cards back in their "hiding place", hopefully for a lot longer this time, barring any home or car emergencies (like this one).
A quick check on Credit Karma revealed no changes to my estimated score from the last time. Not surprising, given it's been less than a month since I last checked.
I'm reading a new money management book which gives yet another way to manage your payments, so this week we'll analyze the sixth (or so) debt payoff strategy.
Do you become frustrated by how slow some things take? Even though I know I've only been making two months of credit card payments I feel like there should be a much bigger dent in the debt - probably because I blog about it so much!
Monday Spent: $1.45 coffee
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Monday Saved: $0.00
Card 1: $2,752.02 (+ $32.51)
Card 2: $2,047.82 (+ $104.85)
Card 3: $409.29 (-123.50)
Card 4: $3,579.61 (-$300.00)
Total debt: $8,788.74
For a difference of $288.14 less than when we started. Blah. That's kind of depressing. But at least I'm under the $9,000 mark.
We get paid this Friday, so I'll be able to throw my credit cards back in their "hiding place", hopefully for a lot longer this time, barring any home or car emergencies (like this one).
A quick check on Credit Karma revealed no changes to my estimated score from the last time. Not surprising, given it's been less than a month since I last checked.
I'm reading a new money management book which gives yet another way to manage your payments, so this week we'll analyze the sixth (or so) debt payoff strategy.
Do you become frustrated by how slow some things take? Even though I know I've only been making two months of credit card payments I feel like there should be a much bigger dent in the debt - probably because I blog about it so much!
Monday Spent: $1.45 coffee
------------------
Monday Saved: $0.00
Friday, March 16, 2012
Credit Chameleon
On the recommendation of a friend, I decided to check out Credit Karma, an online service that allows you to see your TransUnion credit score (not the same as your FICO score) for free. In addition, you also have the opportunity to see your credit report card so you know what areas you to improve on. I was a bit hesitant to utilize the site, as giving out personal info to unverified, third party companies isn't something I'm usually comfortable with. I familiarized myself with their privacy policy and used Internet Explorer's "In Private" browsing feature which restricts cookies. I was relieved they did not ask for my whole SSN, just the last four digits. Here's how I faired:
Credit Report Card: C (ouch! definitely thought I'd do better than that!)
Open Credit Card Utilization - C - my utilization ratio (balances divided by credit limits) was 43%
Percentage of On-Time Payments - A - 100% !
Average Age of Open Credit Lines - D - my average is a little less than 4 years, with the oldest credit line being 7 years.
Total Accounts - B - 21 (14 active, 7 closed)
Hard Credit Inquiries - C - 3 in the past two years (most likely all from buying the house last year)
Derogatory Marks - 0
Total Debt: $175,557 (79% mortgage, 16% student loans, 5% credit cards)
Debt to Income Utilization - 62% (just me, hubs' salary not included)
Credit Score: 686 (double ouch)
That score represents an almost 80 point drop from where I was at this time last year. I believe when we started prepping to buy our home, my score was in the 740-750 range. This was the initial kick in the pants I needed to reign in my spending and reverse the downward trend. Checking back in is definitely the boost of motivation I need to keep up the plan.
There's not much I can do about the "length of time" my accounts have been open, save for not opening any new accounts. I'll have to keep watch over the accounts I do have to make sure I'm not charged any kind of inactivity fees - or worse - have cards closed for inactivity. According C.K. accounts open for 8 years or more is what I'm aiming for. Additionally, with the passage of time, the "hard inquiries" on my credit report will disappear as well.
The big area to work on is my utilization ratio. The sweet spot is 20% or less. Now that I have a plan, that number will, hopefully, be achievable in the near future.
What was really cool on the website was the Credit Simulator - Essentially, you can plug in different scenarios and see how it reflects your credit score. For example, if I pay off my credit card debt, my score would rise to 755. If I obtain an auto loan for $12,000, my score drops three points. If I do both those things, my score still rises to 729. Pretty cool.
Has anyone else used Credit Karma (or a similar website)? Raise your hand if you'll have Karma Chameleon stuck in your head the rest of the day. Yep, me too.
Day Twenty Five Spent:
$1.00 vending machine chips
--------------------
Day Twenty Five Saved: $0.00
Credit Report Card: C (ouch! definitely thought I'd do better than that!)
Credit Score: 686 (double ouch)
That score represents an almost 80 point drop from where I was at this time last year. I believe when we started prepping to buy our home, my score was in the 740-750 range. This was the initial kick in the pants I needed to reign in my spending and reverse the downward trend. Checking back in is definitely the boost of motivation I need to keep up the plan.
There's not much I can do about the "length of time" my accounts have been open, save for not opening any new accounts. I'll have to keep watch over the accounts I do have to make sure I'm not charged any kind of inactivity fees - or worse - have cards closed for inactivity. According C.K. accounts open for 8 years or more is what I'm aiming for. Additionally, with the passage of time, the "hard inquiries" on my credit report will disappear as well.
The big area to work on is my utilization ratio. The sweet spot is 20% or less. Now that I have a plan, that number will, hopefully, be achievable in the near future.
What was really cool on the website was the Credit Simulator - Essentially, you can plug in different scenarios and see how it reflects your credit score. For example, if I pay off my credit card debt, my score would rise to 755. If I obtain an auto loan for $12,000, my score drops three points. If I do both those things, my score still rises to 729. Pretty cool.
Has anyone else used Credit Karma (or a similar website)? Raise your hand if you'll have Karma Chameleon stuck in your head the rest of the day. Yep, me too.
Day Twenty Five Spent:
$1.00 vending machine chips
--------------------
Day Twenty Five Saved: $0.00
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