letter to Cap One CEO re limit

Discussion in 'Credit Talk' started by marci, Mar 9, 2001.

  1. marci

    marci Well-Known Member

    Hi all,

    I sent the following letter to Cap One via Planetfeedback.com. A "snail-mail" copy is following
    shortly as well. It would be great if others affected by the limit reporting policy could write
    similar letters. Maybe things will change for the better . :)

    Dear Mr. Fairbank,

    I'm writing to alert you to a serious problem I've had with a policy about a credit card issued
    by you. I have spoken with Ms. Tara Conner of Capital One Executive Offices about this and
    told her that I would be contacting you, as well as the Federal Trade Commission, to further
    explain my dissatisfaction.

    My problem concerns Capital One's refusal to report my true credit limit to credit reporting
    agencies and it's damaging effects on my credit profile in light of Fair Issac's current credit
    scoring model. I hope by bringing this to your attention, Capital One will immediately change
    its credit reporting policy for my benefit, for the benefit of other responsible Capital One
    cardholders, and ultimately for the benefit of Capital One as it seeks to establish long term
    relationships with increasingly "credit-knowledgable" customers.

    Credit reports from the three Credit Reporting Agencies (Experian, Transunion and Equifax)
    include credit scores based, in part, on a "revolving credit balance: credit limit" ratio,
    otherwise known as "percent utilization" of revolving credit. Under the current Fair Isaac
    scoring model (www.fairissaac.com), the "percent utilization" figure accounts for 30% -
    THIRTY PERCENT - of my final credit score, which is an indicator of my ultimate credit
    worthiness. In the model, the higher the "percent utilization", the lower the final credit score.

    I will first explain in simple math why Capital One's policy is damaging in general and will then
    explain why it hurts me in particular. A customer may have a Capital One "credit limit" of
    $1000 and a "high credit" (i.e highest amount ever charged to the card) of $100. If the
    customer has a current balance of $80, according to the FICO scoring model, the customer
    should have a percent utilization of 8% (80/1000), reflecting an accurate balance:limit ratio.
    However, with Capital One, the percent utilization would be 80% (80/100), since the Fair
    Issaac scoring model must substitute the "high credit" amount reported by Captital One as
    the "credit limit". Obviously, a difference of 80% v. 8% utilization is significant, especially
    since, as I metioned above, it accounts for thirty percent of the credit score.

    As for me, the primary adverse reason code as to why my credit score is low is ALWAYS the
    percent utilization figure, or specifically Fair Isaac's code #10 "Proportion of balances to credit limits is too high on bank revolving accounts." My percent utilization should be 64%. However, because of Capital
    One's policy, it is 93%. The inaccurate percent utilization gives me a lower credit score,
    damages my overall credit worthiness, and subjects me to either denial of credit or
    "tiered-financing" of credit with higher interest rates, costing me more money. With
    increasingly automated or "FICO-driven" underwriting, in which computer derived credit
    decisions are solely based on credit scores, I cannot - as _____ suggested in our
    conversation on the phone - present a bank statement from Capital One to potential lenders
    showing my true credit limit. And according to the Fair Credit Reporting Act (FCRA), I shouldn't
    have to. The FCRA is very clear that any creditor must report only "complete and accurate"
    information to the three credit reporting agencies. Complete reporting would necessitate
    inclusion of a credit limit - especially since this limit is used to derive credit scores.

    I have repeatedly asked Capital One to begin reporting my true credit limit with no success. I
    finally received a letter from Capital One stating that it refused to report my credit limit to the
    three report agencies, but would only continue to report my high credit. Because I think that
    your policy not only hurts me but also violates the Fair Credit Reporting Act, I will forward my
    letter to you and the letter I received from you to the Federal Trade Commission (FTC), and
    any other business or regulatory agency as I feel necessary. I want this policy changed and
    I want Capital One to immediately begin reporting credit limits to the agencies.

    I am pleased with Capital One for three reasons: your company has excellent customer
    service, your company extends credit to customers with various credit histories, and your
    company grants credit line increases in a responsible way (as to prevent over-extended

    However, all of the efforts of Capital One to establish and maintain good business
    relationships with its customers is undermined by the decision to withold credit limits from
    credit reports. As Americans become more aware of credit scores (Fair Issaac is already
    making scores available to consumers nationwide), more and more people will better
    understand what affects a credit score and more Capital One customers will realize that
    Capital One's current policy seriously harms them. Therefore, in the interest of making your
    company "customer-friendly", and in keeping long term relationships with responsible
    customers, please change your policy.

    As long as the policy remain unchanged, I will use my card minimally to keep my credit
    utilization low. And I will not recommend Capital One to others, since I think the policy is so
    damaging to people's overall credit worthiness.

    I appreciate your taking the time to listen to my complaint and suggestion for improvement.
  2. S.D.

    S.D. Guest

    Re: letter to Cap One CEO re l

    Wow, this letter is great! =0)
  3. Gregory

    Gregory Well-Known Member

    Re: letter to Cap One CEO re l

    I think your letter is EXCELLENT! I hope you succeed!
  4. Erik

    Erik Well-Known Member

    Re: letter to Cap One CEO re l

    Nice going. I just sent this email to webinfo@capitalone.com

    The FCRA requires that if you report credit information to the CRA's that it must be accurate and complete.

    Within the next 5 days will you start reporting credit limits to the CRA's for all your customers?



    Thank you,
  5. Mike

    Mike Well-Known Member

    Re: letter to Cap One CEO re l

    So Cap1 only reports the high credit and not the limit, but isn't the overall credit score based on the payment histories of all the cards you have in your wallet? If you have 5 other cards which do report the limits, wouldn't this negate the credit problems caused by Cap1? I agree that is totally unfair for any bank not to report limits, but would the impact on your record be so much as to get denied for future loans?
  6. Erik

    Erik Well-Known Member

    Re: letter to Cap One CEO re l

    If you have 5 other cards the damage by Capital One is probably minimal yes.
  7. Donna

    Donna Well-Known Member


    Great letter, Marci. I sure hope your efforts yield results.

    Since I have two CapOne cards, I need to get on the stick and submit a complaint as well.

  8. Mike

    Mike Well-Known Member


    Forgot to ask this:

    Is the high credit the highest total amount charged to the card during a billing period?
  9. Erik

    Erik Well-Known Member


    I'm pretty sure the high balance supposed to be the highest balance ever and not just during that particular month.
  10. ShyGuy

    ShyGuy Well-Known Member

    send a copy to Congress

    It would hurt to CC your representative and senators on this will a note about how the FCRA should be strengthened. We don't have the dollars to make the banking lobby, but letters do sometimes make a difference.
  11. miles

    miles Well-Known Member

    Re: send a copy to Congress

    This is a GREAT letter marci! I have two Capital One accounts and I also do not like
    the fact that the limit is not reported. My only saving grace is my Providian account
    which has a high limit to offset the damage. I think I will also write a letter. Power
    is in numbers!
  12. marci

    marci Well-Known Member

    Re: send a copy to Congress

    Thanks to all for your support and encouragement! I encourage you all to write your own
    letters, if you're affected by this problem.

    Mike and Erik: yes, the high credit is the highest amount ever charged to the card, not just
    the high credit for a particular month.

    Shyguy: yes, I did cc this to all of my state representatives. I will also cc a snail-mail letter
    to my state AG, Virginia's state AG, the OCC, and whoever else could apply.

    I think that this is not only a FCRA violation, but also a form of libel since it makes people
    look riskier than they truly are.
  13. Kitty

    Kitty Well-Known Member

    Re: send a copy to Congress

    Great, I think CRA's need to take this matter into consideration and Banks should ensure the accuracy of the credit scoring system. I know I have been a victim of denial based on high balances on my revolving accounts to which I know I have paid back significantly.

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