I know that Capital 1 has always played the game of reporting "high balance" instead of the actual credit limit and then a few Citi cards (Citi Aadvantage) began not reporting credit lines either but Chase has always reported limits on every report I've seen. Except, now I have a new Chase card and they are only reporting my high balance. I hate that CC tactic and I hope it is not a new trend. I've posted the article that reports on this sneaky strategy but it's worth repeating: LENDERS HIDE DATA Big credit card companies, such as Discover and American Express, are better off holding back credit line information than sharing it. It helps them hold on to their best customers and keeps competitors away. Here's how. Say a lender checks a consumer's credit report and sees an American Express account with a $10,000 credit line. The lender may send out an offer to that consumer for a card with $15,000 of credit or one with a lower interest rate. "We don't want to make it easy for our competition to try to steal our customers," says Gail Wasserman, vice president of public affairs at American Express. Once one credit card company starts holding back information, others follow. "What happens is two credit grantors decide not to report credit line information. Two becomes four. Four becomes eight â?¦ Someone else says 'I won't report balance,' " says Tony Jones, vice president of sales and services at Experian, a major credit bureau. "We really start to disadvantage the consumer. The file gets weaker and weaker." Holes in consumer credit files affect credit scores. Some people may end up paying more for credit than they should because their credit score is lower than it should be. "The underlying component is the data. If we don't have data, we don't have stable scores," Jones says. Plus, as much as lenders hate the idea of competitors wooing their best customers -- consumers may come away with better deals. "Reporting positive history opens up customers to competitors -- that's good for consumers," Torres says. "They sell everything else about you but they don't give this up. I think that frustrates a lot of people." Industry efforts largely ignored So far industry efforts to address this problem have had little impact. The Office of the Comptroller of the Currency, Federal Deposit Insurance orporation, Board of Governors of the Federal Reserve System, Office of Thrift Supervision and the National Credit Union Administration sent an interagency letter warning banks, thrifts and credit unions of the trend in January. Freddie Mac and Fannie Mae, two secondary marketing agencies that buy loans from mortgage lenders after they're made, are refusing to do business with lenders that hold back information from credit bureaus. However, very few of the loans that they buy are from subprime lenders. The country's three major credit bureaus, Equifax, Trans Union, and Experian have also taken action by beefing up their marketing policies. Lenders that report none of their customers' credit information have been blocked from using a credit bureau's marketing services for some time. Now lenders that withhold any aspect of credit information will feel the pinch. Under the new policies, a credit card company that won't disclose credit line information on its own customers can't view the credit line information of other companies' customers. Ditto for subprime lenders who fail to report payment history information. "It's kind of like you get what you give," says Colleen Martin, a spokeswoman for Trans Union. Whether these changes will nudge more lenders toward full credit reporting is hard to say. Since implementing its policies in January, more than 20 lenders have moved to full file reporting, says Rob Hogan, senior vice president of operations at Equifax. Experian reports that a large credit card issuer started reporting credit line information again earlier this spring. "We've had people come back who went over to the dark side," Jones says. "They've come back to the light. So there is some good news." But some experts believe companies that are entrenched and prospering in the "dark side" aren't likely to budge. These companies can live without peeking at credit lines or payment histories of competitors' customers. The nation's largest credit card companies, with their vast marketing and risk analysis departments, aren't likely to change the way they do business because credit bureaus have tightened their marketing guidelines. "They can buy information or compile information on their own that's going to be just as good â?¦ They're that sophisticated," Mandell says. As for the subprime mortgage lenders, they, too, can land new customers without the help of credit bureau data. They get plenty of walk-in business and they can hire a mortgage list company to track down credit-needy customers. "It may have some effect but it won't address the full weight of the problem," Coffin says. "We don't believe in industry self-regulation. They've been saying they'll self-regulate for years and abuse has persisted and even increased. We'll definitely pursue legislative action." Legal action lagging Unfortunately that action may take awhile. The Sarbanes-LaFalce bill has a long way to go before it becomes law, and whether the credit reporting aspect of the bill survives is anyone's call. But it may be telling to note that even a spokeswoman for LaFalce, the ranking minority member of the U.S. House Committee on Banking and Financial Services, says industry attempts at self-regulation need more time to take effect. In the meantime, consumer advocates and regulators continue to urge lenders to come clean with credit information. "We're still here as regulators encouraging full file reporting. That would be the best solution," Gibbons says. As Mandell points out: "The more information that's out there, the more efficiently the system functions, the cheaper the credit will be for you and me." Consumers are urged to check their credit reports to make sure creditors are reporting positive credit information. Torres suggests people keep records of their on-time payments as a safeguard. "Sometimes the burden is just on the consumer."
