MINNEAPOLIS - Credit card companies slashed limits for an estimated 58 million cardholders in the 12 months ended in April, even though a high percentage had good credit scores when their limits were cut.
The widespread cuts hurt about a third of consumers, but most people did not see a big impact on their credit scores, according to a study by FICO, the company that produces the most widely known credit scores. The limited effect may be because lenders often cut limits on cards that were unused or lightly used.
The statistics in some ways verify complaints from consumers that they were targeted despite doing nothing wrong, but also show that the cuts seem to have little negative effect for the majority of people.
FICO, formerly called Fair Isaac Corp., separated the cuts into two waves as it examined data provided by the credit reporting agency Equifax. About 25 million cardholders saw their limits cut between April and October in 2008. Limit cuts jumped 32 percent in the following six months, as the economy faltered and banks looked for ways to cut risk.
Focusing on the 33 million cardholders in the group that saw cuts between October 2008 and April 2009, FICO found most had strong credit histories.