Does your current lender's name affect your future CC approval?

[w20031424]

So if I have thee cards now, three from NFCU, another from local CU. Each has a CL of 20K. And another guy has exactly the same credit score and background(AAOA, etc..), the only difference is that he has four revolver from Amex and each has a CL of 20K.  All these accounts are in good standing.

The question, if they apply for a Chase Credit card, is there a big change that Chase credit analyst give them different CL upon manual review(recon)?  Maybe Chase tend to "beat" Amex's  CL more than a CU? 

Thank you.

[Revelate]

It's just my opinion, but yes:  Amex tradelines are higher quality from an underwriting perspective than any random CU.  Also to your specific example, Chase and Amex are direct competitors currently with their credit card products, I don't think either lender views any CU as such.

That may not last long, those of us in the "know" see that Amex has recently been rather generous to people who know how to use their CLI policy to their advantage, and eventually that will become more common and credit reports will reflect that, and the tradelines will become devalued as a result.

[w20031424]

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@Revelate wrote:

It's just my opinion, but yes:  Amex tradelines are higher quality from an underwriting perspective than any random CU.  Also to your specific example, Chase and Amex are direct competitors currently with their credit card products, I don't think either lender views any CU as such.

That may not last long, those of us in the "know" see that Amex has recently been rather generous to people who know how to use their CLI policy to their advantage, and eventually that will become more common and credit reports will reflect that, and the tradelines will become devalued as a result.

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Umm, interesting. So now I've come up with a plan.. I'll apply for BCP next month and if I get $12K CL after the 3X CLI trick, then I'll come back and ask Chase to beat the Amex CL when I apply for CSP, and also a CLI of my Chase Freedom.

[Open123]

All things being equal, a CU credit line should hold just as much merit as any national bank.  

I'd argue, some CUs should hold more merit since they actually take the time to "know" their customers and verify their income.  However, in practice, this isn't true. National banks have always disdained the CUs classfication to offer a similar product at a lesser cost to their "members."  I speculate that because of this competition, they refuse to accept CUs as "equal" to their peers, as a form of prouduct differentiation.  

I think that's why many times Banks will refer to CUs as a "lesser" TL.  National banks just don't like the cost advantages CUs have from their structure.  And, why would they?  I'm sure Costco wouldn't go out of their way to extend courtesy to Sam's Club.

[Revelate]

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@Open123 wrote:

All things being equal, a CU credit line should hold just as much merit as any national bank.  

I'd argue, some CUs should hold more merit since they actually take the time to "know" their customers and verify their income.  However, in practice, this isn't true. National banks have always disdained the CUs classfication to offer a similar product at a lesser cost to their "members."  I speculate that because of this competition, they refuse to accept CUs as "equal" to their peers, as a form of prouduct differentiation.  

I think that's why many times Banks will refer to CUs as a "lesser" TL.  National banks just don't like the cost advantages CUs have from their structure.  And, why would they?  I'm sure Costco wouldn't go out of their way to extend courtesy to Sam's Club.

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Grin, I think you may be reading too much into this one actually.

I'd argue from the manual UW perspective (or even the automatic underwriting one, someone had to program it off some business requirements list): Amex is well known  by virtually everyone, and I think it's legitimate to suggest that the "prestiege" that Amex cards have in some way carries over to the credit report as well.  This compared to random XYZ CU which the underwriter has never heard of.  

I agree when you look at it from your angle, they should count the same or in some cases be better, but I suspect they don't.  Also in the forums here we've been able to realize that Chase/Amex are competing in their credit card products, and it's worth getting both even from your recent recommendation to jennbar... I'm 100% confident both Chase and Amex are aware of this, and my own Freedom approval likely was somewhat based on the fact I had a few months on an Amex tradeline.  

End of the day it's a red-water market, and they're fighting over the same consumer transactions... with the risk of default lowered from where it was a few years ago, I think either Chase or Amex will happily take a shot to get into the pocket of anyone who passes the sniff test and has a tradeline from the other.  I doubt it's that explicit, but I strongly suspect it factors into the decision somewhere.

[Open123]

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@Revelate wrote:

Grin, I think you may be reading too much into this one actually.

I'd argue from the manual UW perspective (or even the automatic underwriting one, someone had to program it off some business requirements list): Amex is well known  by virtually everyone, and I think it's legitimate that the "prestiege" that Amex cards have in some way carries over to the credit report as well.  This compared to random XYZ CU which the underwriter has never heard of.  

I agree when you look at it from your angle, they should count the same or in some cases be better, but I suspect they don't.  

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You're right, they definitely don't.  

Objectively speaking, purely from a quantitative perspective and not qualitative, a CU TL should be the equal of a Chase, Amex, Citi, US Bank or BofA TL; but, it's never seen that way by the national banks.  

Qualitatively speaking (all things being equal), I can see where "Amex" and "Chase" clients are more appealing to issuers.  For whatever reason, most affluent spenders and drivers of industry aren't with CUs, but with the large national issuers, namely Amex and Chase.  So, if I were marketing a CC or lending services, I'd have a natural bias for Chase and Amex type cardmembers.

By nature, CU customers care more about fees, while Chase and Amex customers care more about rewards.  So, I can see where Chase would place a higher value on seeing Amex on the TL, and vice versa.

PS - CUs have never appealed to me because they never seem to offer the kind of perks and sign up bonuses available from the national banks.  

[enharu]

Just curious, what did u submit when the navy asked for docs?

[bluedog1]

This is an interesting question. Like others have said, I suspect there is some bias on manual review. Before getting in with Amex, I had a hard time with Chase. A few months after I got the BCE I applied again for Freedom and had to recon. Second time around they approved me immediately with the same CL as Amex, no questions asked.

[score_building]

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@Revelate wrote:

It's just my opinion, but yes:  Amex tradelines are higher quality from an underwriting perspective than any random CU.  Also to your specific example, Chase and Amex are direct competitors currently with their credit card products, I don't think either lender views any CU as such.

That may not last long, those of us in the "know" see that Amex has recently been rather generous to people who know how to use their CLI policy to their advantage, and eventually that will become more common and credit reports will reflect that, and the tradelines will become devalued as a result.

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+1 

[navigatethis12]

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@Revelate wrote:

It's just my opinion, but yes:  Amex tradelines are higher quality from an underwriting perspective than any random CU.  Also to your specific example, Chase and Amex are direct competitors currently with their credit card products, I don't think either lender views any CU as such.

That may not last long, those of us in the "know" see that Amex has recently been rather generous to people who know how to use their CLI policy to their advantage, and eventually that will become more common and credit reports will reflect that, and the tradelines will become devalued as a result.

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American Express now has the lowest limits on my reports and the two Chase analysts I have spoken to have only asked about the FIA accounts that I have, which are the highest. US Bank also appeared to match the combined limit on the FIA cards.

Any analyst who values one lender over another is unprofessional in my opinon.