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Senior Contributor
Wolf3
Posts: 3,197
Registered: ‎01-24-2010
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Re: Real Time Balance Reporting is Hurting Consumers


Revelate wrote:


 

 

Edit: I think the "gaming the system" things I occasionally see in the news regarding FICO had more to do with various abuses of AU's and "credit fracking" and other forms of paying for positive tradelines.   Not simply paying one's credit cards early.  No lender cares about that, arguably they *like* that, and since the lender is the customer for FICO, I don't see FICO's changing.  To wit, the earlier the bank gets the money, the more money they make on their own fractional interest instead of us.

 

 

 


 

IMO, paying for positive tradelines, and AU abuse is just plain FRAUD.   It is far beyond gaming the system.

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webhopper
Posts: 7,225
Registered: ‎09-16-2011
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Re: Real Time Balance Reporting is Hurting Consumers


jordanmedical wrote:

Lenders still know if you max out as highest cl is still reported on CRs.


 

If your limit is 4200 and your highest reported balance is 4157... that is not a bad thing. I see it as a sign that you are making full use of your existing tradelines. In fact; on my discover card back when the limit was only 3500 I needed to charge about 1400 in work related travel. I maxed out and my balance reported was 4126. Literally 2 months later they gave me a CLI to 4200. Granted I had paid in full by that time

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Revelate
Posts: 9,640
Registered: ‎12-30-2011
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Re: Real Time Balance Reporting is Hurting Consumers

[ Edited ]

Wolf3 wrote:

Revelate wrote:


 

 

Edit: I think the "gaming the system" things I occasionally see in the news regarding FICO had more to do with various abuses of AU's and "credit fracking" and other forms of paying for positive tradelines.   Not simply paying one's credit cards early.  No lender cares about that, arguably they *like* that, and since the lender is the customer for FICO, I don't see FICO's changing.  To wit, the earlier the bank gets the money, the more money they make on their own fractional interest instead of us.

 

 

 


 

IMO, paying for positive tradelines, and AU abuse is just plain FRAUD.   It is far beyond gaming the system.


Ethically I completely agree with you; that said, arguably we pay for secured tradelines, so the line has to be drawn somewhere when it comes to gaming the system.  Is obtaining a secured credit card to help your FICO improve gaming the system?  Is opening a secured installment loan gaming the system in order to get the mix of credit function and potentially move you into a better bucket?

 

I think we can agree these are different shades of gray than some of the aforementioned issues, but I simply don't see paying early as gaming the system in any shape, form, or fashion.  

 

I think longer term if FICO really considered this to be a problem, they'd need to start calculating on what former balances were, and then start looking at trends.  Is balance X trending upward or downward, and at what rate of change?  Maybe it'd need to even get into second derivative terrority, I just don't know; however, that'd give a much better resolution as to whether someone was living within their means while at the same time making the absolute balances irrelevant.  Might be easier to solve now that we know payments vs. charges over a given month are being reported too which might be handy for lenders:  I know I'm getting all my big ticket purchases out of the way now well outside the six month run-up to a mortgage so when they go looking at my bank statements they'll see a nice predictable pattern.  That is probably gaming a different system too! :smileyhappy:

 

Anyway this is probably too much to ask for though anytime in the near future, but it'd neatly solve this issue, if it really is one to begin with.

 

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YahComb
Posts: 599
Registered: ‎03-10-2012
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Re: Real Time Balance Reporting is Hurting Consumers

Paying a balance asap is no more gaming the system than using cash and debit cards. High balance field is there for a reason.

And of Course its not gaming to pay for your own secured line.but paying to have some strangers well established positive history sure as hell is.
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annalog
Posts: 46
Registered: ‎05-04-2011
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Re: Real Time Balance Reporting is Hurting Consumers

[ Edited ]

Wow...I'm surprised this topic generated so much discussion. But I think that's great.

This practice is happening, whether people are aware of it or not.

 

Its primary purpose is to protect the banks.  Isn't that why everthing is done?

It protects the banks by reporting balance increases between statement cycles so if the consumer applies for more credit, other banks can see they have a live unpaid balance on another banks card.   Thus, it protects the potential issuing bank from extending credit to someone who otherwise may not qualify.

To my knowledge, BofA is the only bank that is doing this.  I'm sure other banks are participating or will be participating soon.

 

This protects the banks, plain and simple.  The only problem I have with it, is it does so at the expense of the consumer.

 

There is alot of posts speculating on the fact that I was trying to exploit a loophole.

It isn't any loophole.  

It just about what is fair.   CB reporting is normally done when your monthly statement cuts.  If I carried a balance to statement closing, then I would expect the balance to be reported.  But if I pay if off before the statement closes, and the card reports a zero balance, I don't expect for my credit score to be penalized between statement cycles.  This is the unjustice of it all.

 

Doubting Thomas' should try this on their own, and they will find out that it is surely happening, at least with BofA.

 

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