Sunday, July 29, 2018

credit, credit, credit

Go figure. I wake up this morning and discover that the credit limit on my modest Amazon Prime Visa credit card has doubled—from $1600 to $3200. This is welcome news, especially as I gear up to travel in the States and Europe this year. The bad news is that, for reasons I can't explain, my credit rating has dropped by almost 100 points, taking me from a letter grade of "B" or "B+" (approx. 770 points) to a solid "C" (about 680 points). What happened? I clicked on the "credit-rating factors" button, but most of the negative factors listed didn't seem to apply to my situation—things like "your account was established too recently."*

It could simply be the rash of plane-ticket purchases over the past couple of months: I racked up a pretty big bill when I purchased my tickets to the US and to France. But I thought your credit rating was, in part, a function of how fast and how timely you were in paying off your debts. I always pay at least the minimum amount of my monthly credit-card debt, and most of the time, when I rack up a debt that comes close to my card's limit, I pay the entire debt off within a month, and my credit rating never suffers; at least, it hasn't before now.

This is actually kind of disturbing. I just went to Chase.com and selected the option to pay off my entire current credit-card debt, so I hope this repairs my credit rating. Sometime in August, I'll check my rating again and see whether I'm back in the "B" range. And of course, when I'll have finished paying off my final major debt next year, I'll check my rating again and see whether I am, at long last, in the "A" range.



*Now that I think about it, the "too recently" could be a reference to the extension of my credit line—which, by the way, I hadn't requested: it was simply given to me. The last time I checked my credit rating was a few months ago, and in terms of significant changes, that extension would constitute a major—and very recent—change. I wonder if other people have noticed dips in their credit ratings that coincide with credit-line increases. Another thing to consider is that such dips have occurred before, but I haven't noticed them because I check my credit rating so infrequently (i.e., once every few months).



2 comments:

John John McCrarey said...

That is odd. The unrequested credit line expansion is a reflection of your excellent payment history. I've had that happen before too. Makes no sense that they would use the fact that you have more credit available as a negative on your credit rating. Strange.

Kevin Kim said...

Exactly what I was thinking.