I had a line of credit for 5K from MBNA since 2002. I have used it 2 times, paid it back in full once and was at about 2600 when I wanted to get another advance. I called to get 500 and was told the line was not accessible to me. I called the customer advocate and basically was told a credit report shows my credit usage is too high. They then changed the limit from 5K to 2K. This of course only changes my utilization from under 50% to over 95% adversely affecting my credit report. Can I do anything about this, they had no reason to change the limit as it was not usable anyway. Why are they checking my credit report when I have no lates in over 3 years with them? This is psychotic!!! It's like waking up tomorrow morning and discovering that most man your husband's age cheats so you are going to divorce him. Stupid. Can we sue or something? Threaten to sue, cause someone problems? Any suggestions?
Since you have an open account, they have permissible purpose to obtain copies of your credit reports. Most CC companies inquire once a month, every month, but use an Account Review (AR) that is not visible to other companies and does not affect your FICO scores. If they see rising balances they may decrease limits or change other terms such as interest rates. Your best protection is to have competitive credit relationships with multiple banks, with good terms, and not use too much. The utilization on a single card is probably less of an issue to other creditors than the overall utilization. In addition, existing terms on balance transfers at fixed rates are more likely to be honored than carried purchase balances, as long as you have no negative information appearing such as defaults on other accounts. Since they have indicated they are changing your terms due to information in your credit report, they should be sending you a written Adverse Action Notice, indicating what credit report they based this decision on. If they don't send you that, or if they just put a generic notice in your statement, write them and specifically request it. (See FCRA.) Use that to request a free credit report from that CRA within 60 day of receiving your notice of adverse action, to see if there is any other negative item on that report.
They did send me a letter stating my line would be decreased. My problem is that changing the limit served only the purpose of damaging my credit report. They had already shut the line down, they had already disapproved additional disbursements. Since they stated my balances to available was to high, they must know changing my MBNA utilization from under 50% to over 95% would hurt my credit. I should be able to do something about this, shouldn't I?
