Do You Have A Capital One Credit Card?
Capital one chooses to report your high balance to the credit report agencies rather than your credit limit. While on the surface this doesn’t seem like a big deal , once you take a closer look you will learn why so many consumer advocates disagree with this practice.
Revolving Debt Utilization is 30% of the credit scoring model, which is your credit limits in relation ship to your current balance on any revolving account. So if you have a credit card that has a $5,000 limit and a $2,500 balance then you are 50% utilized. The higher the percentage the lower your credit score.
Thus Capital Ones decision to report your high balance , rather than your actual credit limit can artificially suppress your credit score. Say, for example that the highest amount you ever charged in a month was $ 3,000. Then in the above example you would appear to be 83% utilized rather than 50%. This is happening to millions of Capital One credit card holders right now.
