Discover What American Express Never Tells About Credit Reporting

The American Express card has spent years and years branding itself as the card you can’t leave home without. While the AMEX card has been one of the consumer’s preferred credit cards to own not much has been discussed when it comes to the way it reports the payment history of it’s customers.

While the majority of the media is focusing on credit lines being reduced, bank failures, and so on I want to address something that knowone seems to know about or pay attention to. Back in 2007  only after numerous consumer complaints nationally Capital One finally started reporting the true credit limits of it’s customers after years of only reporting the maximum balance used on consumer’s credit cards.

These credit limits showing on your personal credit profile have an important impact on your credit score because it reflects your true debt to credit limit ratios.

Unfortunately, some creditors like American Express have not adopted this practice and as a result millions of consumers are left out of the dark when it comes to ensuring their own true credit limits are being accurately reported on their credit reports to this day. This of course impacts the credit score and impacts what type of interest rate and/or loans a consumer qualifies for.

American Express and HELOC

American Express and HELOCS (Home Equity Lines of Credit) are known for not reporting the accurate credit limits of an account. For example, the American Express green card does not have an actual credit limit so the limit reported on the credit report of the consumer is actually the maximum amount that you have ever spent on that card. So if all you have ever charged on your AMEX was $3,000, and you paid it in full when the statement came and then you spend another $3k the following month, the $3,000 limit reported would show that you are using your card at 100% of your credit limit.

So what’s the solution?

Until AMEX comes to their senses and starts reporting the true credit limit of it’s customers you have to meet them at the court and play the game.

You basically have the power to set your own credit limit with AMEX on your credit reports. The question is what’s the percentage you want to shoot for on your debt to credit limit ratio with AMEX? No more than 30%! So, if you know that you regularly charge let’s say $3,000 per month on your AMEX then you want to make sure that the true credit limit reporting for your AMEX account on your credit reports is $10,000 or more. Why? Because if your limit reporting is $10,000 for AMEX and your charging $3k monthly then you are right at 30%, therefore your score will boost tremendously!

How do you set your own credit limit?

To increase and leverage that AMEX credit limit higher on your credit report, you should use your AMEX card and spend over $10,000 such as travelers checks or something like a TV then pay it off when the statement comes. Be sure to only set your limit if you know you can pay the balance in full when your statement comes in! The last thing you should do is go into debt simply for the purpose of raising your true credit limits with AMEX.

So once your statement comes in pay it in full. Next, go back to spending $3,000 again like normal. Your AMEX credit reporting limit would then increase to $10,000 as your limit and your regular spending habit of $3,000 would be below 30%.

You will need to reset your limit again in about 7-8 months so keep that in mind. This insider secret is priceless and this strategy alone can build credit fast and boost your credit scores 25 or more points!

Another option to offset your debt to credit limit ratios and boost your scores is by adding new credit lines with large limits and no balances.

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About the Author

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for AllBusiness, a subsidiary of Dun and Bradstreet and author of “Eight Steps to Ultimate Business Credit” and “How to Build Business Credit with No Personal Guarantee.” His articles and blogs have also been featured in the SBA Community, American Express Small Business, Business Week, The Washington Post, The San Francisco Tribune, Scotsman Guide, Alltop, Entrepreneur Connect, and Active Rain.