Back in June FICO announced they would be rolling out a new formula for calculating their credit score used by all three major reporting services. This updated product would no longer consider an authorized user account as a valid card holder and any credit information about the authorized user would be dropped. This seemingly minor change is expected to affect over 30 million US cardholders, inducing a small to moderate drop in their credit scores.
Now Capital One has announced they will start, for the first time, reporting the credit limits of their card holder accounts. But how does this affect you?
This recent policy change by Capital One may alter the credit scores of some cardholders. Since FICO bases around 30% of their score on credit-to-debt ratio, having accurate credit limit data available will make their scoring product more accurate. The real impact though will be mostly unknown until the changes are made and have had a chance to work through the FICO system and roll out to the credit reporting agencies.
Currently only Capital One and American Express withhold credit limit information when reporting account data to FICO. The effect of...
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