Released: August 05, 2007

Capital One will report high credit limits

Source: Kenneth Harney, Washington Post (Free Registration)

A major credit card company is ending a long-standing practice that critics have said raised many of its customers’ borrowing costs when they applied for mortgages and home-equity loans.

Capital One Financial, based in McLean, said it will start reporting all cardholders’ credit limits to the three national credit bureaus - a step that could boost the FICO credit scores of some of its 50 million card customers within a few months.

Higher FICO scores, in turn, will allow Capital One cardholders to qualify for lower mortgage interest rates when they buy or refinance homes. An increase from 659 to 700 would have cut an applicant’s mortgage rate quote last week from 7.68 percent to 6.59 percent on a 30-year fixed-rate mortgage of $300,000, according to Fair Isaac, the developer of the widely used scoring system.

Read Full Article: Capital One will report high credit limits