Confused about why my monthly credit card spend is affecting my credit rating.

Jerry_Mander

CliveOfIndia said:What do you mean by "take more out" - do you mean you use it for purchases, or you make a cash withdrawal?

Actually, thinking about it ... I wonder if it's a timing thing?

Ok I'll try to be clearer. I'm not taking any cash out - there'd be a huge charge for doing that and there is never any charge. It comes out as one lump sum but as a purchase.

And it's not a timing thing. I pay back the full amount (everything done online) and then wait until the statement is generated showing me that the balance is zero. So the statement has been generated for that month and I can start spending again knowing that it can't be affecting that month's credit in any way. Only then do I do the same thing again and make a purchase for a pound under whatever the credit limit is. I hope that's clearer but not sure.

eskbanker

Jerry_Mander said:

Also, I actually do this on three credit cards I have but only the one is reporting it as exceeding my credit limit. I have raised it as a dispute with Equifax but they say the provider says they are right and that's the end of the matter.

Jerry_Mander said:
Suffice to say I really just want to know why it is being flagged as exceeding my credit limit so that I can take it to the ombudsman as it looks like that's where this is heading.

Have you asked your card provider directly, and if so, what did they say?  Does your reference to disputing with Equifax mean that there's a discrepancy between what the card provider and Equifax are saying?  Which one are you heading to the ombudsman about?

Jerry_Mander

CliveOfIndia said:

Jerry_Mander said:

eskbanker said:

No idea why you'd choose to do that, but is it perhaps possible that your aggregate spend between statements exceeds your limit, e.g. if you make multiple repayments?

I am careful not to exceed 70% of my total credit aggregated over the three cards (as suggested by Clearscore).

If you always clear the cards in full then your percentage utilisation is irrelevant - you can usually ignore most of the advice given by the CRAs.

Surely this can't be true because that's exactly what's happening to me. Are you saying that if I had three cards each with £1000 credit limit I could use all £3000 as long as I pay it back before the statements are generated and still not exceed my credit limit? You're saying it only matters if it actually gets billed? I'm confused.

born_again

Jerry_Mander said:

eskbanker said:

No idea why you'd choose to do that, but is it perhaps possible that your aggregate spend between statements exceeds your limit, e.g. if you make multiple repayments?

I am careful not to exceed 70% of my total credit aggregated over the three cards (as suggested by Clearscore). But only this one card issuer is reporting me as being over my credit limit and I'm doing the same thing with all three credit cards (though not all at the same time as that would take me over). This is what confuses me most, that only one is consistently reporting it as exceeding my credit limit.

Stop believing the stuff CRA's tell you, they only do that in the hope of selling products to you.
Lenders do not use their made up figure.
They look at your credit history & income to available credit. As well as their own internal scoring.
Different card providers report to different CRA's & also use different methods of working out.

If you are not going over your credit limit, then you need to ask that provider why they are reporting you as being over & get them to correct the entry.

CliveOfIndia

Jerry_Mander said:

CliveOfIndia said:

Jerry_Mander said:

eskbanker said:

No idea why you'd choose to do that, but is it perhaps possible that your aggregate spend between statements exceeds your limit, e.g. if you make multiple repayments?

I am careful not to exceed 70% of my total credit aggregated over the three cards (as suggested by Clearscore).

If you always clear the cards in full then your percentage utilisation is irrelevant - you can usually ignore most of the advice given by the CRAs.

Surely this can't be true because that's exactly what's happening to me. Are you saying that if I had three cards each with £1000 credit limit I could use all £3000 as long as I pay it back before the statements are generated and still not exceed my credit limit? You're saying it only matters if it actually gets billed? I'm confused.

Exactly.

As I said, the CRAs like to give you lots of waffle as to how to improve your credit rating/worthiness/whatever you care to call it.  But since they're not the ones lending you money, it matters not one jot what their view of you is.

If you have 3 cards each with a £1000 limit and you spend £1000 on each one every month, that's fine.  All the lender cares about is that you pay back what you owe them.

OK, in reality it's probably wise to not push it right to the limit, in case you go over-limit by mistake (buying foreign currency, for example, is usually counted as a cash transaction.  Buy £1000 worth of Euros, your credit card gets debited with £1000 plus a few quid in cash advance fees, suddenly you're over limit without realising it).

But yes, in principle there's nothing wrong with using your available limit, provided you always repay it in full and on time.

As to why you're being reported as over limit, that's a different question.  If you are genuinely spending no more than £1000 at a time, and there are no fees or pending transactions lurking in the background to confuse things, I'm at a bit of a loss.

Though I am still intrigued as to why you don't simply wait for the statement to be generated before paying in full

Jerry_Mander

born_again said:If you are not going over your credit limit, then you need to ask that provider why they are reporting you as being over & get them to correct the entry.

Well I'm definitely not exceeding my credit limit, I know that for sure. I know exactly what my credit limit is and always stay at least £1 under it just in case.
I complained to the credit card provider and they responded with a generic response that didn't directly address my complaint. So I thought I'd short the process and raise a complaint through Equifax and the credit card provider still insisted they are right, so that was an end to it as far as Equifax was concerned. I love Equifax's response ... "Your case has been resolved". No it bloody well hasn't lol!

CliveOfIndia

You need to realise that Equifax cannot arbitrarily change data on your file - they simply report on the data that is provided to them by the lender.  If the lender is sending them duff information, only the lender can issue a correction to Equifax.

I do get that you're being passed from pillar to post - but in this instance it's only the lender that can make any changes to what Equifax is reporting.  You need to keep on at them - and follow their own complaints procedure if needs be, and if you genuinely feel it's justified.

Jerry_Mander

CliveOfIndia said:I do get that you're being passed from pillar to post - but in this instance it's only the lender that can make any changes to what Equifax is reporting.  You need to keep on at them - and follow their own complaints procedure if needs be, and if you genuinely feel it's justified.

Yes, I'll give the credit card provider another call. What annoys me though is that the provider doesn't provide any justification or explanation for their decision. If they had I wouldn't be here trying to find out what it is they are really doing and why. Thanks anyway.

eskbanker

Jerry_Mander said:
Well I'm definitely not exceeding my credit limit, I know that for sure. I know exactly what my credit limit is and always stay at least £1 under it just in case.

That's a very small margin of error!  Going back to an earlier comment, are you potentially spending more than your limit in total when measured from one statement date to the next?

Jerry_Mander said:
I complained to the credit card provider and they responded with a generic response that didn't directly address my complaint. So I thought I'd short the process and raise a complaint through Equifax and the credit card provider still insisted they are right, so that was an end to it as far as Equifax was concerned. I love Equifax's response ... "Your case has been resolved". No it bloody well hasn't lol!

As above, approaching Equifax lengthens the process rather than shortening it!


Which provider is it?

born_again

If you have a £1000 limit, spend say £900, then pay it back once it's debited & then spend another £900 in a statement period you have not gone over limit & it should not be reported as such.
Even if you over limit within statement period & brought it back under limit, that should not be reported as overlimit.

Reporting overlimit would be you have gone over the limit at time of statement being generated & received the £12 Charge for such.

Have you ever been charged for going overlimit?

So something you have not mentioned. Do you carry a balance over from month to month or are you paying statement balance in full. So you have a zero balance at the start of the statement period?

Like @eskbanker who is this company?
As I would be going back on the complaint & say you are not satisfied with their answer as to why they are marking you over limit. If you are then not happy you can then raise it to FOS to rule on.