Is it legal for a Credit Card to report a Credit limit higher than what is given?

My husband and I are trying to clean up his credit. We went to this Credit Counselling program and they told us with their program they have a pre-paid Credit Card that we would have to pay $225.00 in Admin fees and have a Credit Limit of $500.00. But they will report to the Credit Union that our Credit limit is actually $3000.00 thus boosting his Credit Score.





I am wondering if this is something that is Legit or not. We are not to sure about it.|||First, It does indeed sound shady, however the credit limit DOES affect your score, which is why their using it as a selling point. What they're basing it on is the fact that if your report reflects that you have an account with a $3,000 limit, of which you only have a %26lt;$500 balance, FICO will perceive that as an open account in good standing that has a low balance (thus decreasing your balance-to-limit ratio, or giving it that appearance) which may increase your score.





Second, Pre-paid? I'm assuming that this means the same thing as "secured"? You need to be sure. In any event, $225 is a HEFTY fee. I would imagine that what you are paying for is the $3,000 thing...other than that..NOT WORTH IT. He can get a secured card anywhere and pay as little as $29 for an annual fee (Capitol One has one for $0) and get the same rebuilding benefits....





Lastly, I would be very cautious about these back door quick-fix schemes that are out here.





Hope this helps!|||Sounds shady. First, there's no such thing as a "prepaid credit card". I'll assume what you're talking about here is a secured credit card, and you should run fast in the other direction if they want you to pay $225 in fees up front. Capital One, for example, offers a secured MasterCard with a $29 annual fee that will help you build positive payment history.





Second, what really matters to your FICO scores in addition to payment history is your credit utilization ratio. If you have $500 in available credit, you don't want to spend more than about $50 at any given time. The key is to keep this ratio at 10% or less if possible, and your FICO scores should continue to improve. I would tell this "credit counselor" to take a hike and start learning these things for yourself. There's nothing they can do that you can't easily manage yourself.|||Your available credit limit doesn't even factor into your credit rating - thus proving any company willing to lie on your behalf to someone else is always more than happy to lie to you too.





This credit counselling program is a scam. Get out as fast as you can. Go buy a book about credit repair - there's nothing you can't do yourself you do NOT need to hire someone to help