Friday, August 10, 2007

Capital One changes credit scoring

Capital One Financial Corp. says it will report cardholders' credit limits to the three national credit bureaus -- a step that could boost the FICO scores of some of its 50 million card customers by 40 to 80 points or more in a few months. Here's an article on the move.

As many of you know, this failure to report credit limits often artificially depresses credit scores by lowering a persons "utilization of available credit" i.e. how much cap room do you have on your credit cards.

I think a fair generalization to remember is that when you're dealing with credit card companies and insurance companies, unfortunately, you must treat these relationships as extremely adversarial and CYA. From things like "credit limits" that really aren't limits to misrepresentations about COBRA deadlines...these are areas that I must be the "asshole" lawyer even in my non-professional life. I recall a good quote from a seminar, "those insurance companies don't build the huge and stunning buildings by paying out claims."

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