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Prime credit cards versus sub-prime credit cards?

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mongstradamus
Super Contributor

Re: Prime credit cards versus sub-prime credit cards?


@Anonymous wrote:

@kdm31091 wrote:

For FICO purposes, it does not seem to matter. A credit line is a credit line. Your utilization is your utilization. The FICO score does not care who the credit line came from.

 

 

This is true but on manual review lenders definitely view subprime credit cards and loans as a negative


Its kind of funny that loans count as negative on manual reviews, but they are positive on fico scoring for installment loans. Thats quite odd to me



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Message 11 of 87
Anonymous
Not applicable

Re: Prime credit cards versus sub-prime credit cards?


@mongstradamus wrote:

@Anonymous wrote:

@kdm31091 wrote:

For FICO purposes, it does not seem to matter. A credit line is a credit line. Your utilization is your utilization. The FICO score does not care who the credit line came from.

 

 

This is true but on manual review lenders definitely view subprime credit cards and loans as a negative


Its kind of funny that loans count as negative on manual reviews, but they are positive on fico scoring for installment loans. Thats quite odd to me


This is true.  The credit score world can be screwy that's for sure.  In reality the score is just that a score but it's what inside the package that counts.  Sorta like meeting a beautiful woman and wanting to take her home but that one thing makes you pause, you investigate further and find out that she's a complete b**ch and you have to say goodbye 😜

Message 12 of 87
Chris679
Established Contributor

Re: Prime credit cards versus sub-prime credit cards?

I can't imagine payday loans are reporting to credit bereaus. As far as subprime accounts being viewed as negative, I don't buy it. I think a First Premier or Credit One card is not looked at as favorable by an UW as a major card but it shouldn't be. I don't think any account with positive history would be viewed as negative they just don't carry the same weight because the approval standards are so much lower.
Message 13 of 87
Anonymous
Not applicable

Re: Prime credit cards versus sub-prime credit cards?


@Chris679 wrote:
I can't imagine payday loans are reporting to credit bereaus. As far as subprime accounts being viewed as negative, I don't buy it. I think a First Premier or Credit One card is not looked at as favorable by an UW as a major card but it shouldn't be. I don't think any account with positive history would be viewed as negative they just don't carry the same weight because the approval standards are so much lower.

I know it's true at least for loans.  They refer to them as 'consumer finance' accounts and that is a negative term.  Seen it twice used in a denial letter 

Message 14 of 87
Imperfectfuture
Super Contributor

Re: Prime credit cards versus sub-prime credit cards?


@Anonymous wrote:

@kdm31091 wrote:

Depends how subprime, really. If you are talking about things like payday loans and stuff, it's a negative.

 

A Credit One credit card account in good standing I don't think could be considered negative, but maybe I'm wrong. It's still a positive credit account.


But because the credit lines are quite limited in size. It would be considered a negative when it comes to manual review. A small negative is still a negative.


I respectfully disagree.  Granted 3500 Amex card with only 500 secured credit card and 1250 sub prime FNCC card showing (cap one hadn't reported yet.  This was an online app, instant decision.  So no underwriters involved.  If your account age and score, income warrants it, instant approvals generally mean no scrutiny by underwriters. And cap one doesn't seem to have dissuaded chase, again an instant approval.

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Message 15 of 87
kdm31091
Super Contributor

Re: Prime credit cards versus sub-prime credit cards?

Agree that I don't think it matters. Credit lines are credit lines.

Message 16 of 87
Anonymous
Not applicable

Re: Prime credit cards versus sub-prime credit cards?


@Imperfectfuture wrote:

@Anonymous wrote:

@kdm31091 wrote:

Depends how subprime, really. If you are talking about things like payday loans and stuff, it's a negative.

 

A Credit One credit card account in good standing I don't think could be considered negative, but maybe I'm wrong. It's still a positive credit account.


But because the credit lines are quite limited in size. It would be considered a negative when it comes to manual review. A small negative is still a negative.


I respectfully disagree.  Granted 3500 Amex card with only 500 secured credit card and 1250 sub prime FNCC card showing (cap one hadn't reported yet.  This was an online app, instant decision.  So no underwriters involved.  If your account age and score, income warrants it, instant approvals generally mean no scrutiny by underwriters. And cap one doesn't seem to have dissuaded chase, again an instant approval.


You said it. No analyst scrutiny.

Message 17 of 87
CreditMagic7
Mega Contributor

Re: Prime credit cards versus sub-prime credit cards?

I dunno. I was questioned very heavily by a BofA rep on my BBR approval asking tons of questions specifically about my crappy subprime Cap1 GM Card.

 

How do you like them? Any particular features of that card which you feel are useful to you?

 

I felt like crap trying to explain it away while in the back of mind saying "this card has to go" Smiley Mad 

 

Needless to say it's since GONE!

 

I think on manual review that some stronger scrutiny is placed over our entire credit layout, and who knows exactly whether they are taking/making notes of prime vs subprime vs store cards or if it is any factor at all.

 

But when they single out a low low limit card that is remained that way while your others have routinely advanced limits, those can be more easily isolated.

 

 

Message 18 of 87
chwebb1
Established Contributor

Re: Prime credit cards versus sub-prime credit cards?

I wouldn't be surprised if FirstPremier/CreditOne are considered negatives, since I'd guess 99% of people get them because they can't get anything else (i.e. their credit was at one point bad).

 

As far as Barclaycard being considered subprime, I don't agree with that sentiment. They have some very prime (and somewhat hard to get) cards, such as the Ring, Sallie Mae, and Arrival.

 

I would guess that most banks prefer to see accounts with well-known prime banks, i.e. AMEX, Chase, Citi, Discover, Barclaycard, etc, rather than FirstPremier/CreditOne.

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Message 19 of 87
NRB525
Super Contributor

Re: Prime credit cards versus sub-prime credit cards?


@Anonymous wrote:

@Chris679 wrote:
I can't imagine payday loans are reporting to credit bereaus. As far as subprime accounts being viewed as negative, I don't buy it. I think a First Premier or Credit One card is not looked at as favorable by an UW as a major card but it shouldn't be. I don't think any account with positive history would be viewed as negative they just don't carry the same weight because the approval standards are so much lower.

I know it's true at least for loans.  They refer to them as 'consumer finance' accounts and that is a negative term.  Seen it twice used in a denial letter 


I'm going to have to disagree with this one. Here is a sample of the available Reason Codes to choose from:

 

Too Few bank revolving accounts

Too many bank or national revolving accounts

Too many accounts with balances

Too many consumer finance company accounts

Too many recent inquiries last 12 months

Too many accounts recently opened.

 

I'm seeing a general pattern here, and it isn't "opened two consumer finance accounts".

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Message 20 of 87
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