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Moderator
Revelate
Posts: 9,732
Registered: ‎12-30-2011
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Re: Real Time Balance Reporting is Hurting Consumers

[ Edited ]

Not sure on the merits of this change or not but two random things struck me:

 

High balances have been reported for a very long time, this isn't a new change with banks trying to figure out a method of "fixing" things (I don't really think they're broke anyway).

 

The only real change if this becomes a reality is it will now firmly swing things towards the merits of CL chasing: if I typically spend 2K in any given month, then I realistically need 25K assuming I'm near PIFing each statement cycle.  I'm just not sure how much it'll affect things otherwise except for those of us who know the system better than the average bear.

 

I was perfectly happy with my roughly 7K limits and being more than comfortable living within that.  If this goes through, meh, I will be aggressively chasing a big tradeline perhaps via the SDFCU secured card Crashem keeps touting.

 

Edit and P.S.  If this is actually being trialed at BOFA, and it is remotely reasonable in terms of costs to the lender and the bureaus, Chase, Amex, Citi, Barclays, other big honking lenders will probably switch as soon as they can change their systems to accomodate it.

 

 

 

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 673, EQ 8 707, TU 720, EX 702* (09/02/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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jamesdwi
Posts: 1,967
Registered: ‎09-16-2011
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Re: Real Time Balance Reporting is Hurting Consumers

I guess if this becomes wide spread, AMEX will reap the benefits big time, as well as other companies that offer hidden tradelines. 

 

Personally I would think that only sub-prime and near sub-prime cards would be subjected to this treatement. Why would you want to make a change that effects your top teir customer,  too many big deal dollar/pts promotions out there, people would just SD a card that did this to them. Who cares if I charge up 5k on a 6k card if I PF every month. 

 

 


Cards: Chase Southwest 20k & CSP 10k & Freedom 6.6k & Amtrak 4.6k, FNBO DISC 14.9k Oregon Duck 5k, & AMEX BCP 15k & Hilton Surpass 7.5k & Delta Gold 6k & Zync NPSL, Sally Mae5k Sams Club MC 10k, Paypal Extras MC 6k, CapOne QS 2.5k, QS 750, Amazon 3.9k, Walmart 4.5k, Citi Simplicity 7k, HHonors Gold 1k (moved 5k CL to Simplicity), Discover IT 6.5k and a nice stack of store cards.
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Revelate
Posts: 9,732
Registered: ‎12-30-2011
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Re: Real Time Balance Reporting is Hurting Consumers

[ Edited ]

jamesdwi wrote:

I guess if this becomes wide spread, AMEX will reap the benefits big time, as well as other companies that offer hidden tradelines. 

 

Personally I would think that only sub-prime and near sub-prime cards would be subjected to this treatement. Why would you want to make a change that effects your top teir customer,  too many big deal dollar/pts promotions out there, people would just SD a card that did this to them. Who cares if I charge up 5k on a 6k card if I PF every month. 

 

 


 

If they're going to do it for one, they're going to have to do it for all, otherwise I'm pretty confident that's an easily won class-action lawsuit at the Federal or Supreme court level.  The ACLU among others would have a field day. 

 

As for Amex, if they get this working, and everyone adopts it, it's not much of a code change for FICO '12 / '13 (whenever they release a new version) to simply revert back to the '98 model's practice of counting charge cards in the revolving utilization calculation.  Since hidden tradelines defeat the purpose of FICO anyway, I doubt the majority of lenders would go that route, and as such I suspect FICO would cave on that one since it's customers are the lenders, not us.

 

Anna, actually I did a quick Google search and I'm not finding any confirmation of this.

 

I looked over my CK from the past few days and my BOFA reported balance hasn't changed at all from when it randomly struck mid-month.  I don't think this was part of a real-time-reporting trial.  I haven't seen your screenshots but I'm actually sort of doubting this is actually happening.  It's going to be a massive tax on their systems which I know aren't designed to scale at that level.

 

 

 

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 673, EQ 8 707, TU 720, EX 702* (09/02/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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bichonmom
Posts: 3,318
Registered: ‎05-05-2011
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Re: Real Time Balance Reporting is Hurting Consumers


LS2982 wrote:

That's not cool.  Just another reason I will keep BofA out of my wallet!!


+1!

 

~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*
EQ FICO 750 | TU FICO 761 (Walmart) | EX FAKO 767 | Goal: 800+

Edits, funky spacing and spelling due to my iPad not getting along with the forum editor!

Senior Contributor
bichonmom
Posts: 3,318
Registered: ‎05-05-2011
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Re: Real Time Balance Reporting is Hurting Consumers


Koop10010 wrote:

Wolf3 wrote:

jcstarkey8826 wrote:

 

 


Loopholes? Unfair? ... If anyone can do It, its not unfair, and its not a loophole. I thought, if anything, it was unfair to report that I rely on my credit cards and look like I carry maxed out limits, when in fact, I pay them in full every month. So instead, I pay them 2 days early. Whats unfair about that???

 

I dont think this BofA reporting is fair either, It would be fair if they reported both payments and purchases actively, but to report only active purchases doesnt seem right. Not a huge issue to me, but I do see it as unfair in some ways.


 

IMO, it is statistically invalid.    I think most people pay their bills when they are due and not a month early.   So to pay early vs paying by due date gives you a better FICO score.   But knowing and using this loophole does not make you a better credit risk, hence your score is artificially higher than it should be.  

 

On the other hand, I don't think it is fair that utilization of people who PIF every month is treated the same a utilization of people carrying balances and paying interest.  Generally the PIF people are a better credit risk.

 

IMO, The way utilization is handled by FICO is very poorly done.   I am not suprised that BOA is looking for other ways to report to help them better determine credit risk..   


Huge +1.  FICO's handling of utilization is pretty stupid.  If you have a $2000 limit card, run up $1900 every month and pay it in full, that is a huge difference from having a $1900 balance and making minimum payments along with a new charge or two.  People who pay in full shouldn't have to worry about paying super early or worry about how many accounts they let report a balance or worry about a card reporting more than 10% utilization and seeing a score drop.


+1! FICO scoring doesn't make any sense at all.

 

I think paying early is just a strategy to maximize your FICO. You have the cash flow, so you're not making it look like you have more money than you do... or that you have more available credit than you do. And really, most people don't do this; it's just something that is discussed here.

 

~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*
EQ FICO 750 | TU FICO 761 (Walmart) | EX FAKO 767 | Goal: 800+

Edits, funky spacing and spelling due to my iPad not getting along with the forum editor!

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jcstarkey8826
Posts: 708
Registered: ‎06-01-2012
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Re: Real Time Balance Reporting is Hurting Consumers

I don't know about other cards, but I don't pay a month in advance. Online it says payment due by sept 20th. I pay the 19th. It reports that balance. Yes like most of my bills I have a grace period, but I pay them early. Maybe it's because I've been going through a major rebuild these past few years, but I don't feel bad about it. Again, anyone can do it. In a perfect world they would only report balances left unpaid. The purpose of reporting a balance is to inform creditors how much someone relies on credit. I don't rely on credit at all. Therefor I don't want to be seen that way. It's a catch 22. I just don't see a loophole, sorry. however, I do agree with the comments about ficos scoring.
In my wallet: GCU Patinum Visa 1500 CL, Charter One Platinum Rewards 500 CL, Chase Freedom 800 CL, Wal Mart Discover Card 6300 CL, Kay Jewelers 3000 CL
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jcstarkey8826
Posts: 708
Registered: ‎06-01-2012
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Re: Real Time Balance Reporting is Hurting Consumers

Loophole-
n.
1. A way of escaping a difficulty, especially an omission or ambiguity in the wording of a contract or law that provides a means of evading compliance.
2. A small hole or slit in a wall, especially one through which small arms may be fired.


I'm not doing anything of the sort by paying a day before the due date. I'm complying with them by paying in advance. The contract doesn't state anything remotely opposing that. Not a loophole for my CC company, not a loophole for my score. Just a guy wanting to make sure he is never late again, by paying his bills in advance.
In my wallet: GCU Patinum Visa 1500 CL, Charter One Platinum Rewards 500 CL, Chase Freedom 800 CL, Wal Mart Discover Card 6300 CL, Kay Jewelers 3000 CL
Moderator Emeritus
webhopper
Posts: 7,225
Registered: ‎09-16-2011
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Re: Real Time Balance Reporting is Hurting Consumers


jcstarkey8826 wrote:
Loophole-
n.
1. A way of escaping a difficulty, especially an omission or ambiguity in the wording of a contract or law that provides a means of evading compliance.
2. A small hole or slit in a wall, especially one through which small arms may be fired.


I'm not doing anything of the sort by paying a day before the due date. I'm complying with them by paying in advance. The contract doesn't state anything remotely opposing that. Not a loophole for my CC company, not a loophole for my score. Just a guy wanting to make sure he is never late again, by paying his bills in advance.

 

I whole heartedly agree. I'm not trying to use a loophole when I pay everything to 0 before the statement cuts. I'm just trying to be responsible. I pay each of my cards 3 times per month just to make sure that I'm never late and never out of the grace period. How is that wrong. My utilization is currently at 0% according to credit secure. I'm going to use my nfcu card to pay for a fence; but I will keep the balance fairly low so as not to spook my other creditors. I don't see how this is bad. Ive let a 5780 balance report to amex in the past... basically to let my other creditors know they are missing out on my monthly spend

Starting Score: 08/29/2011 TU 671 EQ 674
Current Score: TU 754 EQ 694 EX 697
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Moderator Emeritus
webhopper
Posts: 7,225
Registered: ‎09-16-2011
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Re: Real Time Balance Reporting is Hurting Consumers

I think this reporting by b of a will hurt consumers by decreasing competition. If a high balance is reporting; then customers will be less likely to be approved for other cards; thus keeping them using BOA. Big blow to consumers. If the consumers know what is going on they can fight back by boycotting their BOA cards... or never getting one to begin with.

Starting Score: 08/29/2011 TU 671 EQ 674
Current Score: TU 754 EQ 694 EX 697
Wallet: NFCU Visa Sig 25k, Amex Lowes 22k, NavCheck 15k, Amex PRG, Amex Zync, Discover It 13.5k, Amazon Visa 5k
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Wolf3
Posts: 3,197
Registered: ‎01-24-2010
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Re: Real Time Balance Reporting is Hurting Consumers


webhopper wrote:

jcstarkey8826 wrote:
Loophole-
n.
1. A way of escaping a difficulty, especially an omission or ambiguity in the wording of a contract or law that provides a means of evading compliance.
2. A small hole or slit in a wall, especially one through which small arms may be fired.


I'm not doing anything of the sort by paying a day before the due date. I'm complying with them by paying in advance. The contract doesn't state anything remotely opposing that. Not a loophole for my CC company, not a loophole for my score. Just a guy wanting to make sure he is never late again, by paying his bills in advance.

 

I whole heartedly agree. I'm not trying to use a loophole when I pay everything to 0 before the statement cuts. I'm just trying to be responsible. I pay each of my cards 3 times per month just to make sure that I'm never late and never out of the grace period. How is that wrong. My utilization is currently at 0% according to credit secure. I'm going to use my nfcu card to pay for a fence; but I will keep the balance fairly low so as not to spook my other creditors. I don't see how this is bad. Ive let a 5780 balance report to amex in the past... basically to let my other creditors know they are missing out on my monthly spend

Would you then agree that those who intentionly pay before statement date for the purpose of getting a higher FICO score are using the loophole?  It is a loophole by your definition for those who do, they are escaping the difficulty of a lower score.

 

 

 


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