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Citibank and Capital One are NOT reporting credit limits and how it affects one's FICO scores (Complaints to FTC and Capital One, the finger pointing continues)

BayHouse Credit Forum: Fair Isaac FICO and NextGen Credit Scoring: Citibank and Capital One are NOT reporting credit limits and how it affects one's FICO scores (Complaints to FTC and Capital One, the finger pointing continues)
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Ann (Momof3)

Friday, January 12, 2001 - 07:31 pm Click here to edit this post
I had previously posted about Citibank not reporting my limit with Experian, I have since sent Experian my statements with limits highlighted and they said they would update my file. Another customer and I spoke with Citibank this week and they stated the have recently STOPPED reporting limits and this will be their policy. Now I realize they can report/not report what they want to. But if your account is on your reports shouldn't it be completely accurate?? This concerns be b/c I have 12K limit with them and this of course helps debt ratios and I have read that this plays a key role in scoring, and if my balances are shown and NOT limits, would they still factor in my balances with my ratios even though my limits wouldn't be taken in with that equation?? This to me seems totally unfair and I believe if my limits aren't being shown and used in the mix then neither should my balances?? Just curious if anyone knows if they DO NOT include balances unless limits on the accounts are shown?? And EQ and TU have always shown limits so would these stay on reports or could Citibank infact ask for them to be removed???


Thank you:)

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Erik (Erik)

Saturday, January 13, 2001 - 07:38 am Click here to edit this post
Capital One is does the same thing with not showing credit limits. I believe Fair, Isaac just substitues whatever your highest balance was instead of your limit and plugs that into their formula. I just submitted this complaint to the FTC:

I'm deeply concerned that Capital One and some other credit card companies have a policy of not reporting credit limits. The CRAs should not be allowing this either. It is an illegal practice that is harming hundreds of thousands of consumers in the United States. I ask that you enforce the FCRA to stop this practice.

If Capital One can show my credit limit and balance on my statement each month then they should have no trouble reporting that same information to the CRAs.

I'm sure they will give an excuse about not wanting their competition to know what limits they give but I don't think that is the only reason for their policy. I also don't think it is even a legal reason. They are required to report accurate and complete information to the CRAs (FCRA Section 623).

By not reporting the credit limit it is apparent that consumers' credit scores are being artificially driven down. As you know, one of the key factors that affects the consumers credit scores that are sold by the CRAs is the ratio of the balance compared with the limit. If there is no limit then it is likely that they just use the high balance or some modified formula (ask Fair, Isaac) to calculate the score. Since the high balance will almost always be much lower than the limit the consumers are made to look like they are maxing out their credit cards when this is not in fact the case. This problem could easily be solved if Capital One and the other credit card companies would report credit information accurately and completely.

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Christine Baker (Admin)

Saturday, January 13, 2001 - 09:58 am Click here to edit this post
Way to go, Erik! I wonder if you'll get a response.

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Zachary1 (Drcredit)

Saturday, January 13, 2001 - 04:36 pm Click here to edit this post
Now THAT'S quackery!

The only way around that one would be to charge up the account to, using Erik's example, 12K then paying it down to establish a balance of say 1000 to give an artificially created "HIGH CREDIT" of 12K yielding a ratio of 8.3% balance to limit.

Now, imagine that you are loath to even approach your credit limit with Capital One and say, have a balance of 3,500 and then pay it down to 1000. For the FICO purposes, the ratio would be 28.6%, well over 3 times the PROPER ratio created by having the limit reported. Let us assume that in the credit mix are cards of 6K and 9K with both of them maxed out to boot in both scenarios. The proper ratios would be 16,000 owing on limits totalling 27,000 or 59.2% (Probably not too bad a usage ratio for the formula). The screwed-up ratio because of the non-limit reporter would be 16,000 on 18,500 or 86.5% !!! definitely approaching a red flag area for the algorithms to deduct points!

THIS is my understanding, correct me if I'm wrong, of Erik's plea to the FTC regarding this unfair practice, and it must be stopped!

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Erik (Erik)

Tuesday, January 16, 2001 - 11:47 am Click here to edit this post
The FTC did email me a response just now. An email with 4 attachments that are a bit to long to post here. Anyway basically it says:

Re: FTC Ref. No. 1227099
Dear Erik:
This is in response to your complaint concerning your credit report. While the FTC does not collect or keep credit records on individual consumers, it is responsible for making sure that credit bureaus report accurate and up-to-date information. We have enclosed a brochure that addresses your concerns. Between the brochure and this letter we hope to be able to answer all of your questions.


Just their standard response to anyone submitting a complaint about credit reporting...

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Christine Baker (Admin)

Tuesday, January 16, 2001 - 03:19 pm Click here to edit this post
Yup, that's the one I always get.

Very irritating!

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Christine Baker (Admin)

Tuesday, January 16, 2001 - 03:21 pm Click here to edit this post
Erik, have you ever tried Fair Isaac directly?

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Shylock (Shylock)

Tuesday, January 16, 2001 - 05:32 pm Click here to edit this post
The Fair Credit Reporting Act clearly says that credit reports must be accurate and complete but try asking FTC what would be an example of an incomplete entry on a credit profile?

After some thought the lady I was speaking to finally decided that if the account was closed and didn't say specifically that it was then it would be incomplete. She refused to accept that an account that did not show the credit limit on it would be an incomplete reporting.

Words you never want to hear: "I'm from the government and I'm here to help you."

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Christine Baker (Admin)

Tuesday, January 16, 2001 - 05:38 pm Click here to edit this post
Unbelievable!

So, can anyone suggest ANYTHING other than law suits?

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Erik (Erik)

Tuesday, January 16, 2001 - 05:48 pm Click here to edit this post
I did try Fair, Isaac's form directly about this. I forget what I asked exactly but I haven't received a reply and don't really expect to. I've used that form in the past without getting a response.

I did reply to the email from the FTC and asked if it was their position that credit limits don't have to be reported. If they reply I hope it's a different person than the lady Shylock spoke with.

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Shylock (Shylock)

Wednesday, January 17, 2001 - 04:55 am Click here to edit this post
Well, it's a non-issue for me now because every month I would mail to the credit reporting agencies my statement with the credit limit highlighted and a request that they update their records. After four or five months finally Experian did.

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Ann (Momof3)

Wednesday, January 17, 2001 - 05:28 am Click here to edit this post
Well I did that as well with Experian worked first time for my husband, I am on my second try for myself and will continue to do it until they report it. I just hope it doesn't mysterious disappear from Eq and TU or this would become a pain in the butt. Shylock may I ask what bank you had trouble with, Citibank by any chance or Cap 1 they are also notorious for this as well???

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Shylock (Shylock)

Wednesday, January 17, 2001 - 06:55 pm Click here to edit this post
I have a Citibank Platinum VISA and initially they didn't report my credit limit.

I also have an AT&T Universal Platinum Card (also run by Citicorp). They reported on me for two months then stopped reporting at all. I ended up reporting the card lost/stolen (even though I still had it) and disputed the entry with the CRAs to get it reported as lost/stolen.

Not the perfect solution but better than just no new information for 6+ months.

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Christine Baker (Admin)

Saturday, January 20, 2001 - 11:51 am Click here to edit this post
Repost of Erik's posting from Trying to up the FICO Scores for mortgage

Friday, January 19, 2001 - 10:50 pm
---------------------------------------------
I had been planning to do something similar to this in the next month. A couple months ago I applied for a Target card and two of the reasons for my denial were:
High ratio of debt to available credit
High ratio of bank revolving account debt to available credit.

What's funny about those reasons is that I only had one credit card being reported and that was my Capital One card that doesn't report even my credit limit!

Since then I've gotten an FCNB card and maxed out and paid down my Capital One card. I'm planning on trying Shylock's other advice of waiting until shortly after my report gets updated (FCNB hasn't reported since 11/30/2000 in spite of their website claims to report every month). I'm planning on trying for about a 20% balance on both of my cards.

Of course all of this is guess work and unsubstantiated theory. But just think, in a few months we will be able to order our credit reports with scores and without inquiries. That is when the scientific experiments will really begin.

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Christine Baker (Admin)

Saturday, January 20, 2001 - 11:53 am Click here to edit this post
Repost of my response:

Erik, you're right about paying down your balances, and OBVIOUSLY getting another month of reported history will also help, especially since you just opened the account. Makes perfect sense to me, although you now have another inquiry and another new account, both negatives.

"High ratio of bank revolving account debt to available credit."

"What's funny about those reasons is that I only had one credit card being reported and that was my Capital One card that doesn't report even my credit limit!"

Even THAT makes sense to me. It indicates that FICO scoring DOES count the NOT reported limit as EQUAL to the amount owed or ZERO. Which, as you just found out, LOWERS your score.

I think this definitely excludes the possibility of FICO scoring IGNORING the ratio on those accounts.

Is there anything wrong with my conclusion that Citibank and Capital One are LOWERING your credit scores just by having these cards?

And if I were you I wouldn't apply for anything until we can get the Scores directly from the bureaus. THEN we can do some at least semi scientific research.

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Christine Baker (Admin)

Saturday, January 20, 2001 - 11:54 am Click here to edit this post
Repost of Erik's response Saturday, January 20, 2001 - 07:01 am

"Is there anything wrong with my conclusion that Citibank and Capital One are LOWERING your credit scores just by having these cards?"

For most of their customers I would say this is probably true. And definitely true for the first month they report to the CRAs. I don't believe they consider your existing balance to be your limit. More likely they use the high balance (which of course might be equal to your existing balance).

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RichardM (Richard612)

Sunday, January 21, 2001 - 07:40 pm Click here to edit this post
I'll add a data point or two (from looking over my credit reports):

Citibank Platinum - Reporting credit limit to Equifax, but not TU or Experian.

Amex Blue - NOT reporting credit limit to Equifax, don't know about TU or Experian. An Amex rep who hangs out on CardTrak confirmed that Amex does not report. Shame on them. They seem to be a fantastic company to do business with otherwise.

AT&T Universal - Reports credit limit to Equifax, TU, and Experian.

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Erik (Erik)

Monday, January 22, 2001 - 11:54 am Click here to edit this post
I just read Shylock's old creditinfocenter.com post about this. Apparantly someone from Fair, Isaac confirmed that a missing credit limit is bad for scores:

"Well, I got my answer back from Barry Paperno @ Fair, Isaac on a few issues.
.....
As for the lack of reporting the credit limit and did it cost me 17 points, he hemmed and hawed and refused to come right out and say how many points he figured it cost me, but he did say that it definitely harmed my credit profile to not have that credit limit showing."

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Ann (Momof3)

Monday, January 22, 2001 - 03:33 pm Click here to edit this post
Well I just checked my experian report online and finally my Citibank limits are being reported. I had to mail them all my statements and highlight the limits, but they did infact update my reports. So now they appear on all three reports. I am happy I just hope they stay there:)

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Dan T (Dant)

Wednesday, January 24, 2001 - 01:22 pm Click here to edit this post
I have a couple of comments on this subject:

My first comment is that Citibank reports my limit to 2 of the 3 reporting agencies. The third might be because it's late in being reported (my credit limit recently changed). It's unclear. I thought I should post this information, because it's only fair to show as many data points as possible, even though mine don't support the outrage here.


The second comment I have to make is, ironically, a comment of outrage. Ann states the following:

"So now they appear on all three reports. I am happy I just hope they stay there"

This is incredibly unfortunate. Why should the burden be on us as consumers? It's absolutely absurd! Now, Christine is fond of saying that if you don't have a computer and internet access, then you are locked out of the information you need just to maintain your credit reports accurately (paraphrased- I believe I got it correct). Well, I don't agree 100% with that-I would agree it's the most efficient way, but that's not the point. The point is even doing that is jumping through too many hoops.

The fact that the agencies charge $8 apiece just to see your report is ludicrous. Now, technically you can apply for credit, then get your report for free (only if you get turned down), but that’s an awful way to begin your credit repairing process (adding another inquiry, or possibly another account). The system is rigged up so it is as painful as possible to get anything done. Here are the rules (and the law allows for it) that are set up (in a nutshell):

A company collects data about you, and millions others.
This company makes frequent mistakes about the information it holds (understandable considering the amount of information it acquires)
It is unclear what information is harmful, and what information is helpful.
This information this company holds about you can be used against you in your search for the acquisition of credit.
In order to find out if the information this company holds about you is true, you must do one of the following:
1) Pay them (you never asked them to represent you in the first place)
2) Add more information to your file, this information is harmful.

Every time I think about it, my blood boils.

-Dan

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Christine Baker (Admin)

Wednesday, January 24, 2001 - 04:22 pm Click here to edit this post
1) I wonder what criteria Citibank uses to decide how to report. Does it have to do with the type of card?

2) I'm not aware of any other source than the net to get any good info on credit. You did paraphrase me correctly.

3) Unfortunately, the net is infiltrated by the corporate misinformants, so even people who spend substantial time SEARCHING for answers are likely to be mislead. Read:

Another board spreading corporate propaganda and disinformation

4)There is a reason for the credit reporting system. It goes back to 2). Select educated and well to do people can live quite well within this system. Doug Pratt is a notable exception.

a) The idea is to offer 0% interest to the well to do and 25% to the poor to make up for it.

b) Of course the CRAs and the other corporations make good money off the people who do order reports, especially with the credit monitoring services.

c) It keeps people busy. It makes people "value" their credit rating. It also makes them pay debts they don't owe, because of the negative impact of the collection. It makes people NOT go to court to insist on their rights because a judgment will KILL your credit rating instantly.

It's sad, but true. I see it every day.

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Shylock (Shylock)

Wednesday, January 24, 2001 - 05:53 pm Click here to edit this post
Admittedly there is a quantity of information in the credit repository's databases that is inaccurate.

'Thanks' to the 'Fair' Credit Reporting Act companies have to investigate pretty much anytime a consumer decides to dispute something. Accordingly the things that get corrected are not the things that are wrong, but the things that belong to the people that scream the loudest and longest. Too often it is the accurate negative information that is deleted.

This has unintended consequences. To compensate for the lack of accurate derogatory information credit modeling puts heavy weight on things like inquiries, number of charge cards and consumer finance accounts.

If the companies were free from the constraints of having to answer all these disputes they could and likely would develop a new computer model -- an inaccuracy predictor model. This model would be created by the credit repositories randomly checking thousands of tradelines for mistakes.

This new model would then indicate the types of things that are most likely to be inaccurate on a credit report and the types of credit reports most likely to have inaccuracies on them. Instead of consumers being able to brute-force their way into having accurate information deleted the companies would be able to pinpoint likely inaccuracies and correct them.

The 'Fair' Credit Reporting Act is a terrible thing. It doesn't ensure credit accuracy, can't be properly enforced and wastes credit repository money by the thousands of dollars. To make matters worse it contains protections for entities who report inaccurate information, such as exempting them from lawsuits.

For the sake of us all, it's got to go.

A much better solution would be to have a test conducted of the credit repositories every year. The credit repository that had the highest percentage of inaccurate information would have to pay a sizable sum, which would be given to the repository with the most accurate information as a reward.

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Amy Duncan (Amydd)

Wednesday, January 24, 2001 - 09:40 pm Click here to edit this post
Just a quick note about "companies have to investigate pretty much anytime a consumer decides to dispute something."
A couple of years ago I ended up with a 30 day late payment on an account. I was about a week late. I called the company and they said that as long as I was 1 day past my due date, I was considered 30 days past due. I didn't agree and disputed this with the CRA. It came back verified. I let it go for awhile. Then a year later I tried to dispute it again. They refused to investigate saying it had "previously been verified". Another yaer later, exact same thing.
Anyway, my point is that they do not investigate "every time" a comsumer disputes something.

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Senator (Senator)

Thursday, January 25, 2001 - 02:03 am Click here to edit this post
Investigation is a joke--they're too busy worrying about making their own bill payments while dipping the dorito into the taco cheese dip.Disputing is a catch as catch can process. With 34 deragotory items it will take me years but it's down from where it used to be.

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John Shimmer (Jshimmer)

Thursday, January 25, 2001 - 09:06 am Click here to edit this post
The 'Fair' Credit Reporting Act is a terrible thing. It doesn't ensure credit accuracy, can't be properly enforced and wastes credit repository money by the thousands of dollars. To make matters worse it contains protections for entities who report inaccurate information, such as exempting them from lawsuits.

For the sake of us all, it's got to go.


I don't believe it's a terrible thing. If you got rid of it, you'd get rid of your rights to dispute inaccurate information.

It WOULD ensure accuracy IF it were policed and monitored correctly. This means inaccurate info would be removed, while the plethora of accurate, negative information REMAINED. I would agree that the CRA's are absolutely overloaded with millions of disputes of ACCURATE, negative information. But taking away our right to dispute in lieu of a 'yearly accuracy test' is silly.

As for a 'yearly test' in lieu of the FCRA, that would be even worse. If this was the only way to maintain accuracy, you'd end up with this:

"We recently received your dispute, but regret to inform you that our yearly review was performed two months ago. Therefore, you must wait ten months, with your history intact as is, until we run next year's test. Your file MIGHT be part of that test, or it might NOT. If that is the case, you'll have to wait until the NEXT year's accuracy test." Sincerely, [insert CRA name here]

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Dan T (Dant)

Thursday, January 25, 2001 - 09:47 am Click here to edit this post
Absolutely ridiculous! Shylock states the following:

'Thanks' to the 'Fair' Credit Reporting Act companies have to investigate pretty much anytime a consumer decides to dispute something. Accordingly the things that get corrected are not the things that are wrong, but the things that belong to the people that scream the loudest and longest. Too often it is the accurate negative information that is deleted.

And uses this as an argument to get rid of “The 'Fair' Credit Reporting Act”

This (to me) is akin to stating that appeals are heard in the court of law. Many guilty people utilize their right to appeal, and use up valuable court time in the process. It ends up costing our country millions of dollars every year. We should take away people’s right to appeal a courts decision.

I didn’t force these companies to get into the credit reporting business, and if there are costs involved with people disputing correct information, then so be it. I can not understand why you do the whining for the credit agencies. The fact is they hold some sort of power in this country, and are not in the least bit concerned with policing that power. You are advocating that, and it boggles my mind.

-Dan

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Erik (Erik)

Tuesday, February 06, 2001 - 10:37 am Click here to edit this post
Experian finally emailed me a response:

...
It's up the individual creditor to decide what information they report.
You will have to address your questions to the creditor(s).

Sincerely,

Internet Services
Experian National Consumer Assistance Center


So I guess this means the Experian doesn't consider reporting incomplete information a violation of the FCRA on their part. What a bunch of crap.

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Erik (Erik)

Tuesday, February 06, 2001 - 11:23 am Click here to edit this post
Maybe if I pester the FTC I'll get a real response. My 2nd complaint to the FTC:

I have a problem when I am rejected for credit based in part on incomplete information being reported by Experian.
The FCRA requires Credit Reporting Agencies to report accurate and COMPLETE information. Experian is reporting an account on me that does not have my credit limit showing. At the same time they are telling other creditors that I have a "High ratio of bank revolving account debt to available credit". This is even when I only had one revolving account on my credit report and it didn't have the credit limit showing.

It is just their standard policy to allow credit card companies to omit the credit limit while at the same time not adjusting for that fact in the credit score they sell. Surely if they are using credit limits to calculate a credit score (even when that limit isn't reported) then a missing credit limit must be considered incomplete?! If you disagree please tell me your reasoning. This is a problem that is affecting almost all Capital One card holders (Citibank cardholders too from what I hear).

From an email from Experian:
"It's up the individual creditor to decide what information they report.
You will have to address your questions to the creditor(s)."

From an email from Capital One:
"However, we only report the payment history and the highest balance that has been on the account not the actual limit."

From an FTC opinion letter: (http://www.ftc.gov/os/statutes/fcra/boynton.htm)
"Section 623(a) of the FCRA delineates the responsibilities of furnishers of information to consumer reporting agencies. It requires that furnishers report accurate (Section 623(a)(1)), complete and updated information (Section 623(a)(2))."

I sent a complaint about this last month and you basically ignored it.
I have posted my last complaint on an internet forum and I am posting this one there as well.
I would like you to respond to it. The link is:
http://www.bayhouse.com/discus/messages/4/1032.html?980452060

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Christine Baker (Admin)

Wednesday, February 14, 2001 - 08:03 pm Click here to edit this post
Great! I truly believe this is a violation of the FCRA.

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Erik (Erik)

Wednesday, February 28, 2001 - 01:25 pm Click here to edit this post
I submitted another complaint today. Respond FTC!

Complaint:
People want to know your position on Capital One, CitiBank not reporting credit limits besides the fact that it affects credit scores and whether or not it is illegal for them to do so or for the CRAs to allow it.

Please read the threads and post your response:

http://www.bayhouse.com/discus/messages/4/1032.html?982217013

http://consumers.creditnet.com/phorum/read.php?f=1&i=36702&t=36702

Please give an offical response with your reasoning so we don't have to guess at your position and I can stop sending complaints.

Thanks,
Erik

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Erik (Erik)

Friday, March 09, 2001 - 10:03 am Click here to edit this post
An email just sent to webinfo@capitalone.com

------
The FCRA requires that if you report credit information to the CRA's that it must be accurate and complete.

Within the next 5 days will you start reporting credit limits to the CRA's for all your customers?

http://www.bayhouse.com/discus/messages/4/1032.html?983402749

http://consumers.creditnet.com/phorum/read.php?f=1&i=39172&t=39172

Thank you,
Erik

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Christine Baker (Admin)

Friday, March 09, 2001 - 01:00 pm Click here to edit this post
I really wonder if they care about ANYTHING other than a law suit. We'll see.

I see creditnet has a new forum, and I'm no longer banned. I wished I had more time.

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Ann (Momof3)

Friday, March 09, 2001 - 03:28 pm Click here to edit this post
Christine I learned alot from you when you previously posted at creditnet.com. The new site is good , however they can't seem to ban anyone including BOBBY, he posts there all the time and is making the boards horrible. I remember what he did to you. Just thought I'd warn you he is still out there and still at creditnet.com.

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Erik (Erik)

Wednesday, March 14, 2001 - 12:43 pm Click here to edit this post
Capital One emailed me an interesting response:
"
...
I would like to address your concerns. Capital One reports "all"
information, (payment history, high credit, credit limit, etc.), to the
credit reporting agencies. The differences of the information reflected on
the various credit reporting agencies is determined by the credit reporting
agency.
..."

He left me a number to call if I want to discuss this further. Somehow I don't think this is a straight answer. Unless this has been a very recent policy change it certainly contradicts an earlier email they sent me. Why would the CRAs not show the credit limits if Capital One is reporting them? I'll be calling tommorow morning...

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Ann (Momof3)

Thursday, March 15, 2001 - 04:01 am Click here to edit this post
Capital one never ceases to amaze me. All a long that have CLEARLY stated that they DO NOT report limits due to "competitive reasons", now they are claiming that they do supply this information but all 3 agencies are choosing not to report this, I find this hard to believe. Cap 1 card holders should consider sending all 3 agencies their statements and have the limits reported and as Cap 1 has stated they should verify, I highly doubt it though. I agree they are not giving you a straight answer, always trying to put the blame on someone else. I also thinks we shouldn't have to supply this information ourselvesm b/c reports are supposed to be complete and accurate, but we know this isn't true especially with the limits.

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shulamite (Shulamite)

Thursday, March 15, 2001 - 05:44 am Click here to edit this post
CapOne is lying. I have a letter from them
stating that they do not report credit limits to
any of the CRAs.

I'm Marci from the other board. I have not heard
from the CEO yet about the letter I posted there
and I resent it yesterday via Planetfeedback.

An hour after I resent the letter I received
an e-mail from Cap One webinfo stating that
they got my e-mail and would try to respond
within one business day.

I haven't heard from them yet.

Erik, you should get Cap One web info to send you
what they e-mailed you in paper copy, for your
permanent records.

Also, what is the phone number that the letter
gave you for further correpsondence?

marci@uab.edu

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Erik (Erik)

Thursday, March 15, 2001 - 06:55 am Click here to edit this post
I'm just as happy with emails as with a paper letter. I don't think Capital One would ever be silly enough to claim that I am forging their emails.

I spoke with Eugene Cook, Executive Response Specialist (804-968-3899, Ext. 6418) about an hour ago. He seemed to acknowledge that Capital One perhaps doesn't want the CRA's to show the credit limits on the reports (When I asked if we could get Capital One and the CRAs to work together to make sure the credit limits were being shown for Capital One's customers). He said he would look into the situation and get back to me although he didn't sound particularly hopeful that a change would be made. He also said that he worked out of the President's office and this info about how the practice is affecting FICO scores is something that he wasn't really aware of. I should have asked him for the fax number to that office but maybe I'll get it later. If you want to call him I say go ahead, make them aware that this is a problem and maybe something will happen...

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shulamite (Shulamite)

Thursday, March 15, 2001 - 07:25 am Click here to edit this post
Erik,

Thank you for the information. I will call Mr. Cook and let you guys know of the responses I receive (if any) from Capital One about this.

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Christine Baker (Admin)

Thursday, March 15, 2001 - 09:15 am Click here to edit this post
There's one way to find out what's going on, and that's to sue. Sue the bureaus AND Capital One.

No more finger pointing!

If I had more time I'd get one of their cards and do it myself, maybe in a few weeks ...

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Erik (Erik)

Thursday, March 15, 2001 - 09:53 am Click here to edit this post
Yeah I'm starting to think nothing will happen unless they are faced with a lawsuit. I only got that latest email after I threatened to contact a class action lawyer about this (although I'm not sure if Eugene ever saw that email). If they remain totally unresponsive I guess I will try to find a lawyer to take this case.

I confess to being a bit ignorant and intimidated about filing a lawsuit. It seems to me in California you could only name one defendant in a small claims so I'd probably have to subpoena representatives from the CRAs and maybe even Fair, Isaac to prove my case. Even if I did prove it in small claims court I don't think the judges there have the power to force Capital One to report credit limits. A class action I think could be effective but then I wonder about all the delays that could come into a case like that so maybe it would be years before Capital One started reporting properly.

I'm convinced it is in Capital One's best interest to comply with the FCRA as quickly as possible. After all they could probably claim that the powers that be weren't aware that FICO scores were being affected and once they found out they acted quickly. I think the general population (including judges and juries) would be more forgiving if that happened. After all they would have complied before CitiBank and American Express.

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Zeddicus Zuul Zorander (Zeddicuszuul)

Thursday, March 15, 2001 - 04:30 pm Click here to edit this post
Folks, before you start the lawsuit... consider this.

I get to play with (non-Fico) scoring models in my job. Some of those models use balance-to-limit ratios. For the (non-Fico) models I've seen, usually the formula simply ignores the accounts where limits are not reported.

In other words, the ratio is (total balances on the accounts which report limits) divided by (total limits on the accounts reporting limits).

Now, I don't know what Fico does in its calculations. But, if they did the same sort of thing, ignoring the accounts that don't report limits, what you have here is an opportunity to play a little trick on the Fico model.

(Disclaimer: I don't and never have worked for Fico, and I have never seen inside their black boxes. This idea could be wrong. Use at your own risk. If you can prove me right or wrong, I'd like to know.)

In my own case...I have 3 bank credit cards -- a Citibank M/C, a Cap One Visa, and a Discover card with a very high limit. I've run up some nasty medical bills, which I charged to and am revolving on my Citibank M/C and Cap One Visa. I'll occasionally run up balances and/or revolve a balance on Discover to keep them happy, and keep them increasing my limit; but usually my Discover has only incidental charges which get paid off every month.

So, I've got balances on cards that don't report limits, and I usually have a zero balance on the one card that does report.

If my guess about what Fico does is correct, I usually have a zero or near-zero balance-to-limit ratio in the Fico score....even though I do have some hefty credit card bills outstanding (and being paid off, thank heavens!)

And, if my guess is correct, it seems like you might be able to buy yourself a couple of points in a Beacon score if you transfer outstanding balances to cards that don't report limits.

Once again, I don't know that this is what Fico does. I have no way to know. I could be wrong. Use that idea at your own risk.

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Christine Baker (Admin)

Thursday, March 15, 2001 - 05:12 pm Click here to edit this post
Follow up question: are you talking about CREDIT limits or HIGH credit? Are they evaluated differently in your scores?

They are reported in the same column on all the reports I've seen.

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Zeddicus Zuul Zorander (Zeddicuszuul)

Thursday, March 15, 2001 - 06:09 pm Click here to edit this post
Christine:

The tightrope between what I can and can't say which I walked with that last message was pretty darn shaky. I don't want to press my luck too much further.

What I said earlier should match the thoughts a logical person would have if they gave the statisticians behind the models the benefit of the doubt (despite any sleaziness of their employers) -- the stats-geeks know how to make unbiased adjustments for special cases. There aren't too many adjustments that can be made if there's missing information on an account.

Depending on what you're trying to get at, you might need to think along those same lines, or consider that Fico probably has ambulance-chasers review every word that gets released to the public (like reason codes), to make sure they are technically accurate (in some sense of "technically" and "accurate").

Sorry about the vague answer this time around.

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Erik (Erik)

Thursday, March 15, 2001 - 07:24 pm Click here to edit this post
Wow, I just got home and found a message from someone from Fair, Isaac on my machine. I'll be calling tommorow morning.

Zed, if you'll read above there is evidence that shows that FICO does not simply ignore these accounts. Furthermore, even if it were to ignore accounts without credit limits that in itself would affect the FICO scores and doesn't absolve Capital One or the CRA's from reporting the credit limits.

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Christine Baker (Admin)

Thursday, March 15, 2001 - 08:02 pm Click here to edit this post
I think the problem with the credit limit vs. high credit is best explained by looking at Erik's report at http://www.bayhouse.com/discus/messages/1231/1292.html

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Zeddicus Zuul Zorander (Zeddicuszuul)

Friday, March 16, 2001 - 02:51 am Click here to edit this post
I stand corrected. Like I said, I don't get to play directly with Fico models, only the scoring tools a couple of companies have built for their own internal use. What's been said here doesn't match some of my own experiences over here on the Dark Side, but Fico is a strange beast.

There's nothing like feeling like an idiot early in the morning. :)

FWIW, there are many people in the banking & financial services industry that agree that the banks that don't report *should* do so. Part of that is the principle of the thing (the work I do still has me questioning just *how* much of an effect it has on Fico socres), while others have a slightly different viewpoint. (Think junk mail....)

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shulamite (Shulamite)

Friday, March 16, 2001 - 05:55 am Click here to edit this post
I have a "lenders" version of my Equifax report
and it gives me a figure for my percent utilization. The model uses my Cap One high
credit as the credit limit, which results in the
figure that is reported to the lenders.

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Erik (Erik)

Friday, March 16, 2001 - 06:58 am Click here to edit this post
Well I haven't been able to get through to the guy from Fair, Isaac yet. Below is the message I sent them on Saturday that apparently promted their call. I'll keep trying to get through to him:

"I've noticed that Capital One does not report my credit limits and that even when that was the only card on my credit report I was denied credit, in part, for "high ratio of bank revolving account debt to available credit".

Within the next 5 days will you fix the bug in your FICO software that allows my score to be calculated on information it doesn't have (the credit limit)?"

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Erik (Erik)

Friday, March 16, 2001 - 07:18 am Click here to edit this post
Well I did get through to him just now. He didn't know how FICO treats this kind of situation but promised to find out and get back to me...

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Christine Baker (Admin)

Friday, March 16, 2001 - 09:16 am Click here to edit this post
Erik, I like the way you worded that "... fix the bug ..."

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Christine Baker (Admin)

Saturday, April 07, 2001 - 12:29 pm Click here to edit this post
As per Fair Isaac:

The "high credit" WILL be used for calculating balance/limit ratios.

Question: When both the high credit AND the limit are reported, the scores will ignore the high credit and only utilize the limit?

Answer: "I'm not going to give you that level of detail, but lets just say that you're not far off. ... We're not going to tell you first the score looks at this and then at that ..."

I would call this a "BUG" if Fair Isaac didn't KNOW that the "high credit" is usually LESS than the credit limit or if it really is a programming mistake that they rush to fix when it's brought to their attention.

Fair Isaac has NO intention of fixing their software.

It's a deliberate attack on people with little or no credit, by both Fair Isaac and Capital One.

After all, it won't hurt someone with lots of credit cards, but it WILL DESTROY your scores when you are (re-)establishing credit and you have only one or two cards.

Fair Isaac KNOWS about the impact of their failure to exclude the "high balance" from the balance/limit calculations. It is completely illogical.

It is simple math:

Cap one:

Limit NOT reported: 500
Reported high balance: 250

CURRENT balance: 250

The Fair Isaac balance/limit ratio: 250/250 = 100%

The scores are SIGNIFICANTLY lower than with the CORRECT balance/limit ratio: 250/500 = 50%

While we talked about creditors reporting balances HIGHER than the high credit as on Erik's scanned report I didn't find out if Erik's ratio would be nearly 200% and if that would result in an even lower score than the balance/limit ratio of 100%.

When neither limit or high credit are reported, the account is ignored for balance/limit calculations, and the same should apply to the "high credit" only accounts.

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douglas pratt (Dougpratt)

Saturday, April 07, 2001 - 07:27 pm Click here to edit this post
a credit card account with an actual balance that is higher than "high credit" implicates borrower negligence in charging beyond the allocated limit the issuer has allowed. most credit companies hit you with a $29 "overlimit fee" when this happens. the only time this has ever happend to me is when the interest charge kicks me over. in every case, the creditors have extened the courtesy of taking it off. bearing in mind that FICO penalizes those who carry balances close to limits, i have tried to keep each account well below max-- last month, i added $10 to each minimum payment due, thinking that the quackware may be penalizing those making minimum payments due, as opposed to those who pay balance in full or something in between-- i tried both, and it seems to make no difference at all.

FICO penalizes those with large amounts of credit available, whether or not balances are Xero, low, high, or anything else. their motto is don't be prepared-- run to daddy in an emergency.

keeping unused accounts open with large available credit limits has been necessary for me because:

massive repair-- a sudden structural or systemic failure could oblige me at any time to effectuate an immediate resolution, or face shutdown by city authorities. care to imagine what it costs to put tenants up in hotels in the boston area?? with my luck, it would co-incide precisely with harvard's graduation week.

legal issues: big lawsuit, or undergoing eviction ceremonies. so far i have been lucky. what if i have to evict 2 tenants at once? in massachusetts it can take 6 months or more, and you often end up with uncollectable judgements even if you win.

debt rotation: as we all know, most of the credit card companies offer very low interest rates from time to time, on both new and existing accounts. this means you can trade that 20% rate for 5% or less, in some cases 0%- interest free money--:)** unless somebody is going to pay cash to take some off their hands, how can you go wrong with this?? stick it into a CD and pay it back after 6 months if you don't have any better ideas-- love it-:)*


FICO penalizes you for making use of any of these ideas- is a borrower more or less like to default paying off debt at 5% interest, or 20%? i don't stand out begging for free money, but if somebody comes offering it as part of a marketing program so i'll take their free plasticard, isn't taking it a more intelligent business decision than saying No?? i think so-- cancel the account and tear up the card afterward if you don't want it anymore--.

you said it in this last post, and you're right on the money-- 100%, christine. UNfair isaac has absolutley no intention of correcting quackware, and isn't going to unless somebody forces them to do so. why should they??- they have arrived. the federal government has given them exclusivity to control the credit industry, exempted them from any and all consumer actions or complaints, given them levels of priority and secrery most military generals can only dream of, and they get ever so richer every time somebody applies for a mortgage or credit card anywhere in the country, approved or denied. it would be as if i got paid a royalty of $10 for every apartment that rents anywhere in the USA-- my best year, 1998, was $185,000 gross- how would you like to bank that much money every DAY when you wake up, before brushing your teeth? this is what UNfair isaac has to look forward to, and do you think they CARE about you, me, or the future of the US economy?? as i said, you already answered that question for erik, ann, and all of us, most accurately.

i am willing to contribute to the war effort-- if there is legal action to be undertaken, count me in, bearing in mind that FICO has been draining my resources considerably- every dollar going out in interest is one less i put toward principal, and my income fluctuates seasonally-- the time of year is to advantage, as my business is strongest from april through labor day.

i'll be selecting a domain name over the next few days for a central point of reference. my legal staff is available, though very expensive. in the event my employer should take direct interest in this matter, we'll have carte blanche there, but don't count on it, at least for now.

over time, i think i've posted more than enough material about *UN*fair isaac and FICO-- if you wish to go back and review it to complement what i sent you today, more power to you-- please feel free to edit or delete any of my previous posting you consider rant or inappropriate for the board. you now have my contact information-- please be in touch any time at your convenience.

thanks--:)
douglas pratt


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