Credit card issuers cut the credit lines of some 33 million credit cardholders beginning last fall in response to the economy, but the moves affected the credit scores of only a fraction of those cardholders, according to the results of a study released last week by Fair Isaac Corp., which prefers to be known as FICO. Of those whose issuers cut their credit lines between October 2008 and April 2009, some 9 million cardholders' credit reports contained recent negative credit references triggered by risky behavior, such as making late payments, Minneapolis-based FICO found. Issuers reduced the remaining 24 million cardholders' credit limits in the absence of any risk triggers in their credit reports during the study period. Among that larger group, cardholders' median FICO score was 760 in a range of 300 to 850 (the higher the score, the better the credit risk), FICO said. The average reduction in available credit was $5,100, more than double the reduction FICO observed for a comparable group six months before the period reviewed in the study. The overall effect on FICO scores of credit line reductions among the larger group was "negligible," FICO said. An estimated 8.5 million of those cardholders saw their FICO scores decline by less than 20 points, while 3.5 million saw no change in their FICO scores and some 12 million cardholders' FICO scores improved after issuers cut their credit lines. Credit limits and account balances continue to be significant predictors of credit risk for the general population, the study also found. Those who use 70% or more of their available revolving credit are 20 to 50 times more likely to become delinquent on a credit card account within the next two years than are consumers who use less than 10% of their available credit. "Our study suggests that lenders are using a scalpel and not a hatchet to trim their revolving-credit exposure and meet their requirements for regulatory capital," Mark Greene, FICO CEO, said in a statement.

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