cancel
Showing results for 
Search instead for 
Did you mean: 

The oddities of credit

Established Contributor

The oddities of credit

So I’ve been thinking about credit card situation and I have to say that I’m officially confused.  I haven’t had the “goal utilization” of under 30% that people mention on here in a long time.  I was around 50-60 in the early summer and bumped up above 80 after travel in August.  I’m following my plan to reduce that and that’s all going well.  But curiously, in the last three weeks I’ve gotten three CLIS (one each on two C1 cards and 1 on a Citi card).  I’ve also gotten a flurry of offers in the mail, which I’m ignoring since they don’t fit my plan.  Still, I have to wonder why suddently I’m so appealing despite having util that is still around 70%.  What gives?

Chase Freedom: $1500, Citi Diamond Preferred: $3000, Barclays: $3900, Chase Disney Visa: $1500, Chase Southwest Signature: $5000, Citi TY Preferred: $3000, Cap One Platinum: $1750, Cap One Platinum Rewards: $2500, Orchard Bank: $900, Kay Store Card: $6600, PayPal $2200
Message 1 of 7
6 REPLIES
Valued Contributor

Re: The oddities of credit

Wish I had an answer for you, each creditor is different and everyone's situation is different.  

 

I think Citi likes balances.  I have carried a blaance on my Citi card twice, each time I have been offered a CLI, though I was declined when I had $0 on it.  

Starting a whole new chapter
Message 2 of 7
Established Contributor

Re: The oddities of credit

Could be based in a score increase that may be attributed to increase of Aaoa inqs falling off or any baddies also getting off as you have not app for anything you look more appealing. Utilization is just like 25 to 30% weight of a score
Amex PRG NPSL, Amex Delta 2k (AU) Discover iT 5k, BOFA Siggy $5k, BOFA AlaskaAir Siggy 5k, BBVA Compass $5k! Macy's $4.5k, C1 $2.5, SFCU $2.5k, SFCU LOC $2k, Paypal SmartC $4k, Sam's 5.5k Victoria Secret $2k, Kay's $1.7k.,76/Citi $1.5k Amazon $5k, Walmart Disco $3k JC Penny $4k, C1 $2.5, BBRZ 700.
Starting:TU:536 EXP:561 : EQ:552 Current:TU:680 Walmart (2-15-14)EXP:712 FICO!! (12-4-13):EQ:622 (FICO 2-6-14) Uti 27% Goal: 720 By 12-13.
Message 3 of 7
Valued Contributor

Re: The oddities of credit


EaglesFan2006 wrote:

So I’ve been thinking about credit card situation and I have to say that I’m officially confused.  I haven’t had the “goal utilization” of under 30% that people mention on here in a long time.  I was around 50-60 in the early summer and bumped up above 80 after travel in August.  I’m following my plan to reduce that and that’s all going well.  But curiously, in the last three weeks I’ve gotten three CLIS (one each on two C1 cards and 1 on a Citi card).  I’ve also gotten a flurry of offers in the mail, which I’m ignoring since they don’t fit my plan.  Still, I have to wonder why suddently I’m so appealing despite having util that is still around 70%.  What gives?


A lower utilization improves FICO scores.

 

But a higher FICO score is not necessarily the same as an internal score that a CC company uses to determine your value to them.

 

If you carry a balance, you are more rewarding to the bank, and simultaneously a greater risk to them.  I imagine that they have sophisticated models that they use to determine when to grant a CLI.  In other words, they calculate for a given situation whether the reward outweighs the risk.

 

I have high scores, and low utilization, and almost never get any preapprovals.  I expect this is a big part of the reason why.

 

Message 4 of 7
Mega Contributor

Re: The oddities of credit

One way of looking at it say you have a 5k limit. They have 5k tied up in case you use it. If you don't use any of it no return on their money. If you use it and your risk to them is low why wouldn't they want to borrow you more at the rates they charge.

Discover IT $17k / US Bank Ace (VSig) $13.5K / US Bank Cash+ (VSig) $13.5k
Sam's Mastercard $13.5k / Walmart Mastercard $10k / Blispay $7.5k PayPal Ex MC $6.1k
CareCredit 5k / Husq $5k / Cap1 QS $4.5k / Barclay Ring $4.85k / Citi DC (WMC) $7.1k
Gardening Date 7/01/16 / MyFico 08: EQ 801 / TU 777 / EX 771 / 06/08/17
Message 5 of 7
Valued Contributor

Re: The oddities of credit

I NEVER get pre-approvals for anything because I'm a loss leader for the lenders I have, despite my FICO scores, which are high.  I PIF in full every month on all of my accounts. I never carry a balance - ever.  Although lenders make a certain percentage off of charges I make, they never make any thing from me from interest, which is where they make most of their money at 10%+ interest rates on most cards. Yet they still give me progressively higher credit limits in the hope that I will carry a balance some day.  It's a trap that I don't participate in. 

EQ Fico 8 - 846
TU Fico 8 - 848
EX Fico 8 - 836
Message 6 of 7
Highlighted
Established Contributor

Re: The oddities of credit


user5387 wrote:

EaglesFan2006 wrote:

So I’ve been thinking about credit card situation and I have to say that I’m officially confused.  I haven’t had the “goal utilization” of under 30% that people mention on here in a long time.  I was around 50-60 in the early summer and bumped up above 80 after travel in August.  I’m following my plan to reduce that and that’s all going well.  But curiously, in the last three weeks I’ve gotten three CLIS (one each on two C1 cards and 1 on a Citi card).  I’ve also gotten a flurry of offers in the mail, which I’m ignoring since they don’t fit my plan.  Still, I have to wonder why suddently I’m so appealing despite having util that is still around 70%.  What gives?


A lower utilization improves FICO scores.

 

But a higher FICO score is not necessarily the same as an internal score that a CC company uses to determine your value to them.

 

If you carry a balance, you are more rewarding to the bank, and simultaneously a greater risk to them.  I imagine that they have sophisticated models that they use to determine when to grant a CLI.  In other words, they calculate for a given situation whether the reward outweighs the risk.

 

I have high scores, and low utilization, and almost never get any preapprovals.  I expect this is a big part of the reason why.

 


A get that logic when it comes to the CLIs.  Still, I wonder why other banks would see the appeal.  Okay so I've gotten offers from Citi and have a card with them, so maybe that makes sense.  But I have no prior CCs with BofA or Fidelity.  I do have the Fidelity bank account though so maybe that's why. 

Chase Freedom: $1500, Citi Diamond Preferred: $3000, Barclays: $3900, Chase Disney Visa: $1500, Chase Southwest Signature: $5000, Citi TY Preferred: $3000, Cap One Platinum: $1750, Cap One Platinum Rewards: $2500, Orchard Bank: $900, Kay Store Card: $6600, PayPal $2200
Message 7 of 7