MONEY

802 credit score? Still not good enough

About a month ago Bank of America sent me a new Quantum Visa Credit card to replace my soon-expiring card. In the boilerplate letter that accompanied the note they reaffirmed what a good camper I was and that my credit limit would remain at $35,000.

Fast forward to this week. It seems Bank of America changed their mind. They ever so politely told me in another letter: “We periodically review our customers’ accounts to ensure we are offering each cardholder the most appropriate credit line. In some cases, we discover we have extended customers more credit than they are likely to use or need. Given the size of your credit line and the way you have historically used your account, we have adjusted the credit line on your card to $18,000. “Adjusted” ?? Come on, tell it straight: you reduced/cut/slashed my credit line.

In fact, $18,000 is indeed plenty; it was always a mystery to me why BofA gave me such a big credit line. I use the card a few times each month, but it’s basically my back up, as I use a different card that has a good rewards program. What’s so annoying, as you can probably guess, is that this arbitrary move by BofA could screw up my FICO credit score. Shaving $17,000 off of my available credit could have a significant negative affect on the debt-to-available credit ratio that accounts for 30% of a FICO score.

The BofA bean counters were kind enough to suggest I check my Equifax credit report; apparently info in that report was behind the decision to reduce my credit line.

So what gives? Off to annualcreditreport.com to get my free Equifax report. Not so fast; I was told that for security reasons I would need to send in a written request with an absurd amount of documentation. I wasn’t sure what that was about, and my patience was fading, so I decided to head over to myfico.com, cough up $15.95, and check my Equifax score.

Drum roll…..802 out of a possible 850. My FICO report was nice enough to tell me that “Most lenders would consider consumers with a score of 802 to be extremely low risk because 1% of people with this score get into serious credit trouble.”

So why has BofA decided I’m a riskier customer? Well, I bought a house in March. My new mortgage, property tax and insurance is actually 30% lower than the rent I was paying. But credit bureaus don’t track rental payments, so instead of my new mortgage being seen as a good thing, they presumably looked at my total debt load and branded me a higher risk.

So far, the impact to my financial life is low to nil. My credit score doesn’t seem to have taken a hit (yet). But I am well aware I am one of millions of credit card customers going through this “review” process. I’d love to hear if any of you have seen your FICO score actually take a hit because of a reduced credit line.

– Carla Fried

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