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@DigitalArk wrote:
What's AA by lenders? What could possibly happen if they AA you and see all the new accounts?
It means Adverse Action. Honestly, it is pretty rare. One of the AA's you hear about the most, when it actually does happen, is when a lender soft pulls your CR and sees multiple new tradelines and gives a CLD (Credit Limit Decrease)
@DigitalArk wrote:
Thanks! I have learned something. So if someone got a CLD, in what way would he/she be affected? Is just the util?
In most situations, just the utilization.
It usually will drop one's score pretty significantly (about 50-100 points, depends.....). The increase in utilization sometimes raises a red flag in other bank's systems as well, which may be simply because the customer has went above the utilization threshold they have set. As such, sometimes other banks may follow on with their AA as well, which kinda is like a domino reaction. YMMV though. It's always best to diversify to minimize the chances of this from happening.
Another thing to add to the topic:
Look at your CR. If there are major derogs on file, or recent minor derogs (such as 30 day lates. Most banks consider recent as past 12-36 months, depending on bank), it's best to avoid app sprees as well. It's not really a good idea to add a lot of inquiries and/or new accounts on top of an already blemished report. Sometimes it may just make things a lot worse.
@enharu wrote:
@DigitalArk wrote:
Thanks! I have learned something. So if someone got a CLD, in what way would he/she be affected? Is just the util?In most situations, just the utilization.
It usually will drop one's score pretty significantly (about 50-100 points, depends.....). The increase in utilization sometimes raises a red flag in other bank's systems as well, which may be simply because the customer has went above the utilization threshold they have set. As such, sometimes other banks may follow on with their AA as well, which kinda is like a domino reaction. YMMV though. It's always best to diversify to minimize the chances of this from happening.
Another thing to add to the topic:
Look at your CR. If there are major derogs on file, or recent minor derogs (such as 30 day lates. Most banks consider recent as past 12-36 months, depending on bank), it's best to avoid app sprees as well. It's not really a good idea to add a lot of inquiries and/or new accounts on top of an already blemished report. Sometimes it may just make things a lot worse.
When AMEX AA'd me in 2010 and closed my card, Chase did a CLD from $5000 TO $3400. I have no doubt it was because amex had closed my account. I cannot remember the score drop, but I remember it was a decent amount.
new member, check.
120+ day lates reporting, check. (tho 5 years out)
Denial, check.
APP spree, check.
But you have to believe me, I don't even like shopping. I've been a hardcore checkbook budgeter for the past 5 years, and I am NOT getting into the credit hole ever again. I just kind of got sucked into this new game I found of racking up my credit points. I'm sorry if I'm being a bad influence!
@watch44 wrote:new member, check.
120+ day lates reporting, check. (tho 5 years out)
Denial, check.
APP spree, check.
But you have to believe me, I don't even like shopping. I've been a hardcore checkbook budgeter for the past 5 years, and I am NOT getting into the credit hole ever again. I just kind of got sucked into this new game I found of racking up my credit points. I'm sorry if I'm being a bad influence!
You are not a bad influence at all, lol. I was more talking about people who are currently 120+ days behond on their debts applying for credit. Not 5 year old baddies.
The credit hole can be quite danergous but it is only dangerous if you charge up more than you have in cash. I cannot remember the last time I charged something I could not PIF once it posted. I use my cards for the extra protection on larger purchases. That is what is excellent about this forum. There are so many people with different experiences and can help you stay on course.
I happened to stumble across the entertaining "App Spree" Logic..help me understand this. the other day.