Good credit-card customer or deadbeat? The jury's out

I wish credit-card companies would make up their minds about me.

On May 1, I received an e-mail from Citigroup informing me that the credit limit on my Citi Platinum Select card would be raised from $13,400 to $14,800, with a cash-advance limit of $6,000 –– enough to book a hideaway vacation with Gov. Mark Sanford's travel agent.

On June 8, I got a letter from American Express telling me that the limit on my Amex Blue card was being cut by half –– from $2,000 to $1,000 (the cash-advance ceiling was halved as well, to $200). I received that card months ago and have used it only twice: June 8 (at Walgreens) and June 12, when I used it to renew my subscription to The Wall Street Journal. Shouldn't buying diapers for my kid and keeping up with the latest financial news prove I'm a responsible adult?

Since I received the Amex notice by mail, one can assume that they cut my limit as soon as I activated the card. This simple act already has, undoubtedly, harmed my credit score, because it's inflated my debt-to-credit-line ratio. The effects can be widespread, with credit reports even being used to turn away otherwise qualified job applicants, as the L.A. Times noted (view article).

I was confused, so I called them. The gentleman in Account Services explained that the decision was based on several factors, including overall level of debt; the number of credit-card accounts I currently have open (I won't say how many, but here's a clue) with Amex and others; other debt, including student loans; and inquiries made to credit-reporting agencies.

As far as I know, the only inquiry that would have been made, with my permission, was in applying for this very same card, Amex Blue. He also told me that, according to Experian, my credit score is a very-respectable 750. What's the problem, then?

"There were other inquiries," he said, ominously.

Citibank, on the other hand, loves me to pieces. The customer-service representative who picked up the phone had a Southern accent and asked me what kind of day I was having. I could practically see her twirling her hair on the other end of the line. I spoke to her supervisor and said, "I'm not complaining, but I was just wondering why Citibank raised my credit limit when others are cutting it?"

"If you have a good history here with us and continue to make payments on time, our credit department does periodically review the accounts, and if you have a good history with us, they give you credit line increases periodically," the supervisor said.

But Amex says they take into account other debts.

"We do too," she responded. "If there was something on the bureau report, and if it was really negative, I’m sure there’d be no qualification for an increase there." She added that Citi uses information from all three credit-reporting agencies, but Equifax is used more than Experian or TransUnion.

The lesson here is that you should check your credit reports at least once a year, because the score can differ with each agency, and errors can make a difference. Read here and here for more information on how credit scores work.

One card issuer is skeptical of me, and another adores me (although that one probably is less fond since I took out the Amex Blue). Am I a great customer or a deadbeat? Probably somewhere in between. But that kind of nuance is hard to find in a three-digit number.

Landon Hall – A freelance writer in Silicon Valley, Landon was a reporter, sports writer and editor at The Associated Press in Portland and New York City from 1997-2006.