Do CCC judge you by the cards you have?

[Subexistence]

I wonder if a CCC algorithm detects a first premier, then it expects you to have higher chance of defaulting.

If you have a BBR card, would the algorithm mark you as a churner and find a reason to turn you down?

It seems rational that a CCC would have internal algorithms that do something like this. Although I haven't seen any proof confirming this.

[longtimelurker]

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@Subexistence wrote:

I wonder if a CCC algorithm detects a first premier, then it expects you to have higher chance of defaulting.

If you have a BBR card, would the algorithm mark you as a churner and find a reason to turn you down?

It seems rational that a CCC would have internal algorithms that do something like this. Although I haven't seen any proof confirming this.

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The credit report doesn't show the specific card, so while it could penalize the FP, it wouldn't know that the BoA wasn't a good honest god-fearing card, rather than the MyFico Lovechild for "freeeeee money".

Anyway, churner is the wrong term here ("perk abuse" is probably the phrase, but BoA created the issue).   For real churning, the CR would provide some evidence, lots of new cards with perhaps some closures (to meet lenders credit exposure requirements) but again they couldn't tell which actual cards were in the mix

[DeeBee78]

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@Subexistence wrote:

I wonder if a CCC algorithm detects a first premier, then it expects you to have higher chance of defaulting.

If you have a BBR card, would the algorithm mark you as a churner and find a reason to turn you down?

It seems rational that a CCC would have internal algorithms that do something like this. Although I haven't seen any proof confirming this.

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If they do, they're definitely not going to tell us. 

[K-in-Boston]

It seems logical that some algorithms may pick up on certain lenders; and I'm sure that analysts differentiate between them, consciously or not.  More times than not, someone whose report consists solely of Credit One, Merrick Bank, and FIngerhut, usually has some other factors that would deter a lender.  But let's not kid ourselves, an analyst doing a manual review is going to give much more consideration to the person with Chase, Citi, and BOA showing than the aforementioned lenders.

[Anonymous]

A wise man once said, you're the credit card companies you keep.

[wasCB14]

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@longtimelurker wrote:

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@Subexistence wrote:

I wonder if a CCC algorithm detects a first premier, then it expects you to have higher chance of defaulting.

If you have a BBR card, would the algorithm mark you as a churner and find a reason to turn you down?

It seems rational that a CCC would have internal algorithms that do something like this. Although I haven't seen any proof confirming this.

---

The credit report doesn't show the specific card, so while it could penalize the FP, it wouldn't know that the BoA wasn't a good honest god-fearing card, rather than the MyFico Lovechild for "freeeeee money".

Anyway, churner is the wrong term here ("perk abuse" is probably the phrase, but BoA created the issue).   For real churning, the CR would provide some evidence, lots of new cards with perhaps some closures (to meet lenders credit exposure requirements) but again they couldn't tell which actual cards were in the mix

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CLs on closed accounts could give some clue about what they might have been. Low CLs can suggest rebuilding, whereas high ones suggest churning. I expect BBRs could be well-disguised.

I wonder if a $500 Amex (or even two or three $500 or $1000 Amex cards) would look nearly as bad as a card from a subprime issuer. For them, it would be a CL that likely reflected some significant concerns.

[UpperNwGuy]

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@Anonymous wrote:
A wise man once said, you're the credit card companies you keep.

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Exactly!  And the real issue is not the algorithms, it's the manual review by a loan officer.  Any loan officer can scan an applicant's credit report and quickly determine if they have (or have previously had) cash management issues.  All loan officers know who the lenders are that focus on people with poor credit.

[K-in-Boston]

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@wasCB14 wrote:

<snip> I wonder if a $500 Amex (or even two or three $500 or $1000 Amex cards) would look nearly as bad as a card from a subprime issuer. For them, it would be a CL that likely reflected some significant concerns.

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I hope not.  I purposely nerfed my "Blue from American Express" card's limit (moved to daily driver SPG) since it's sock drawered until I decide to close it (hoping for a better PC option to come along, or at least a targeted ED/EDP "upgrade" offer).  I've had it for 15 years and sometimes forget it's even there; I mentioned the other day that with Kohl's raising the $3k cap that Target is now my lowest card, but it's actually this one.  Granted I could raise it to $21k in 10 seconds on Amex's website, but yeah if there were any evidence of what you brought up, I'd throw some of its line back.

[Anonymous]

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@UpperNwGuy wrote:

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@Anonymous wrote:
A wise man once said, you're the credit card companies you keep.

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Exactly!  And the real issue is not the algorithms, it's the manual review by a loan officer.  Any loan officer can scan an applicant's credit report and quickly determine if they have (or have previously had) cash management issues.  All loan officers know who the lenders are that focus on people with poor credit.

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But how often do people do manual reviews? I have only gone to manual review  once and it was for my Bank of America 99/500 getting unsecured.  They seemed to be Ok with my Fingerhut account.  They probably were well aware of me having bad credit in the past as it was a 99/500 card.  

[K-in-Boston]

I've had 4 manual reivews for apps in the past year or so, and 3 manual reviews by analysts for existing cards.  YMMV of course.