Does having no preset spending limit hurt your credit score?

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_rob
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Does having no preset spending limit hurt your credit score?

Postby _rob » Mon Mar 03, 2014 2:53 am

Hello guys
I've been building my credit for the past 2 years. I started with a Secured CC and i remember I was around 640 when i got it. Then i started going up till around 740, then i got a prescreen for the AMEX Gold rewards, i applied for it, but then i got this No Preset Limit.

But after 4 months of using it i noticed my Credit Score to be going down and down, last time I checked it was around 705....

Is that something common with these type of cards? I'm just thinking of canceling before it gets worse. I've been doing the same i did before, never a late payment and i have been using it as much as i can (and paying in full after each month) to get the rewards, but man...

What should i do? Any suggestions would be appreciated.


thank you.


thom02099
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Postby thom02099 » Mon Mar 03, 2014 10:33 am

AMEX charge cards are factored in differently than their (and other issuers) revolver cards, for score calculations. My guess is there's something else going on with the data in your report that's causing the score drop. Having a NPSL card, in and unto itself, shouldn't be the sole cause.
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travisrauh
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Postby travisrauh » Mon Mar 03, 2014 11:39 am

For our Charge Cards, we report the *high balance* for [I think] the past 6 months as your credit limit in order to stop people from seeing 47,000% credit utilisation on their reports. There can be a delay in the high balance reporting if it's a new account. If you have your most recent credit report in hand, you can call the number on the back of your card and ask to be transferred to the Credit Bureau Unit and they can see exactly whether or not this drop is being caused by your Charge Card or not.
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_rob
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Postby _rob » Tue Mar 04, 2014 12:57 am

Thanks for the help guys, im gonna call and see if they know what's up.

benhollberg
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Postby benhollberg » Wed Mar 05, 2014 10:12 am

I think this is what may be hurting my score. The majority of my spending is business related and goes onto my AMEX business gold card which is under not own SSN, not my business EIN since the company is an LLC. I run about $19-20k constantly each month and it is always about that same amount my unitilization is getting reported at near 100% each month then. Is this correct, am I understanding it right? My other cards have very low utilization and always paid in full but I noticed my score has never gone over 770.
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takeshi
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Postby takeshi » Thu Mar 06, 2014 7:40 am

Low utilization and PIF alone aren't going to guarantee a score over 770. There are always the other standard factors at play. Your charge card usage isn't factored into your scores the same way as revolving utilization and business really shouldn't affect personal IIRC.

MrMosby
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Postby MrMosby » Thu Mar 06, 2014 7:55 am

My understanding is if you have the pay over time feature enabled it will report as a credit card instead of a charge card, but with the same limit calculation mentioned above.

This will in fact hurt your credit, if you don't have the pay in full feature it falls into the "Other" bucket on you credit card and utilization doesn't have the same affect.

I'm not an expert, this is just what I've heard a few times before.
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thom02099
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Postby thom02099 » Thu Mar 06, 2014 9:43 am

MrMosby wrote:My understanding is if you have the pay over time feature enabled it will report as a credit card instead of a charge card, but with the same limit calculation mentioned above.

This will in fact hurt your credit, if you don't have the pay in full feature it falls into the "Other" bucket on you credit card and utilization doesn't have the same affect.

I'm not an expert, this is just what I've heard a few times before.


Perhaps if you use the feature, this may have an impact. However, I have the Gold card with the pay over time option, haven't used it, and the TL doesn't show as a "credit card" or "other".
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benhollberg
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Postby benhollberg » Thu Mar 06, 2014 12:02 pm

I do not have Pay Over Time on my Business Gold, only on my Platinum. Platinum spending is almost never consistent, sometimes $1k and then sometimes $10k. This may also be a factor but I was assuming it was the Business card since it is almost always $19-20k. Also the Business card is under my own SSN, not my EIN from the Feds to clarify from my previous post. AMEX didn't even want my EIN when signing up.
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cashnocredit
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Postby cashnocredit » Fri Mar 07, 2014 12:38 pm

I have a charge card that has reported balances ranging from 2k to over 50k. Unlike regular CCs, it has zero effect on FICO scores except for the really old, circa 98 FICOs that no one uses.

Also, my high balance has been reported for over a year.

Also, I don't have Pay Over Time. I wouldn't ever use it and the 10K mr points isn't enough for me to bother with.



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