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Senior Contributor
Posts: 11,485
Registered: ‎10-21-2012
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Re: knowing credit line before approval?

[ Edited ]

Fico2Go wrote:

Finstar.. I am afraid I dont have access to proof  that could convince u either way.  that was not my intent.  I was merely suggestign there needs to  be a better way of disclosure the loan amount/CL and/or rate to consumers before the application process.  I understand in the current situation and regulatory environment this may not be possible or desired by the industry.. and yet.. can you name another industry whereby the consumer must invest his credit for a chance of getting something?  

 

Each HP is a loss to his credit score and loss to his overall credit evalutation.  And yet at that point there is no clear product as to what the consumer is really buying or applying for.   I mean really..a HP is just an "opportunity" to get  something.  Meanwhile a single HP can make a consumer miss out on an FHA loan where a single point below 640 would mean no FHA loan.  A single HP can increase a consumer's auto insurance bill. 

 

A single HP can mean the consumer must put down money for a mobile phone account. 

 

A single HP can cost so much more than a chance to get a credit card. 

 

Let's not limit losses arising from a single HP to just credit cards. 

 

Perhaps a better way to explain here is that a HP isn't as critical or as crucial to a consumer as the cost of a HP in score.  Sure inquiries can drop off in two year and the affect of a HP can fade in a years time.. but during this time there's a loss of opportunity to the consumer.

 

Just a thought. 

 


It appears you've been in the capacity of a loan officer so it would seem that you'd have some overall knowledge on how the credit markets work...or maybe just my assumption.

 

As far as another industry whereby the consumer must invest his credit for a chance of getting something... sure, the investment markets, the mortgage industry, auto lending, retail, opening up or expanding a business, fueling the economy... are those enough?  I'm sure there's plenty more.  Credit as a whole plays a big role on our daily lives.  Think of the chair where you sit, someone had to manufacture it based on credit, or the roof over your head, it had to be financed somehow.

 

HPs by design are merely a lender's review of your credit file via permissible purpose.  Too many of those and sure, that score can definitely take a hit.  The relative impact as to how one HP plays a role really depends on the consumer's strategy.  If there is a mortgage, loan, auto or other big ticket item on the horizon then it is on the consumer to be educated and be aware how HPs can impact such standing (i.e refrain from applying for credit if a score is borderline).   Loss of opportunity is really relative and more so on the consumer, not the lender.  Since the opportunity is always there.

Super Contributor
Posts: 15,073
Registered: ‎04-22-2013
0

Re: knowing credit line before approval?


Fico2Go wrote:

Finstar.. I am afraid I dont have access to proof  that could convince u either way.  that was not my intent.  I was merely suggestign there needs to  be a better way of disclosure the loan amount/CL and/or rate to consumers before the application process.  I understand in the current situation and regulatory environment this may not be possible or desired by the industry.. and yet.. can you name another industry whereby the consumer must invest his credit for a chance of getting something?  

 

Each HP is a loss to his credit score and loss to his overall credit evalutation.  And yet at that point there is no clear product as to what the consumer is really buying or applying for.   I mean really..a HP is just an "opportunity" to get  something.  Meanwhile a single HP can make a consumer miss out on an FHA loan where a single point below 640 would mean no FHA loan.  A single HP can increase a consumer's auto insurance bill. 

 

A single HP can mean the consumer must put down money for a mobile phone account. 

 

A single HP can cost so much more than a chance to get a credit card. 

 

Let's not limit losses arising from a single HP to just credit cards. 

 

Perhaps a better way to explain here is that a HP isn't as critical or as crucial to a consumer as the cost of a HP in score.  Sure inquiries can drop off in two year and the affect of a HP can fade in a years time.. but during this time there's a loss of opportunity to the consumer.

 

Just a thought. 

 

 

 

 

 

 

 

 

 

 

 

 


I understand your point and agree it would be good if there was another way.  But it is hardly unique unless you focus on very specific things, like the credit score.  For example:

 

"Do you know that when I invest in a stock, I have NO idea of whether it will go up or down.   I have to put money in, probably incur a commission fee, and have no way of knowing whether this is the best, or even a good, investment, and my money is tied up for a while at least, causing all sorts of opportunity costs.  I think companies should tell us what the stock is going to do and be held to it."

 

Obviously more extreme than your example, but really along similar lines.

Established Contributor
Posts: 961
Registered: ‎12-05-2013
0

Re: knowing credit line before approval?

LTLurker, a security trade can cost $9 to buy and $9 to sell. These are transaction fees to access the market through market makers like etrade, ameritrade, etc .

When trades are executed the equity is at risk/reward unknown

When u sell a stock u know exactly how much u lost or gain. When u buy a stock u know its.cost basis. For CR hard pulls the loss to a consumer isnt limited to denial of credit but can increase other cost as well.

I understand everyones point. But I still think the current system sucks.


Discover IT $19,000 == 12/2013
AMEX 12/2013 ---BCP $12,000 === BC $23,000 ----- 04/2014
CHASE SLATE $5,700 === 12/2013
BoA 123 $6000 === 12/2013
Barclay Rewards $1500 == 12/2013
Community Leader
Super Contributor
Posts: 31,000
Registered: ‎02-07-2013
0

Re: knowing credit line before approval?

[ Edited ]

Fico2Go wrote:
LTLurker, a security trade can cost $9 to buy and $9 to sell. These are transaction fees to access the market through market makers like etrade, ameritrade, etc .

When trades are executed the equity is at risk/reward unknown

When u sell a stock u know exactly how much u lost or gain. When u buy a stock u know its.cost basis. For CR hard pulls the loss to a consumer isnt limited to denial of credit but can increase other cost as well.

I understand everyones point. But I still think the current system sucks.



Under that theory people invested in homes with a lot of HP's for 1 mortgage I might add then BOOM market crash and those Investments are worth half of what they were and some folks are upside down for life... The lucky few that didn't lose everything

 

And Fidelity is $7.95 per trade Lol If you would like to save some money  Smiley LOL

Before you app think...
Have you done your research of the CC?
Does it fit your spending?
Do you have a plan for the bonus w/o going into debt?
Can you afford the AF?
Do you know the cards benefits? Is it worth the HP?
Established Contributor
Posts: 961
Registered: ‎12-05-2013
0

Re: knowing credit line before approval?

Whoa!! you are way ahead of me.  I'm still on the application HP part..   You are deep into losses of the investment after the application is approved.  Fidelity is at $7.95?  I'd be willing to pay double the day if they have security to short under $1.  he-he.

 

 

 

 

 

 

Discover IT $19,000 == 12/2013
AMEX 12/2013 ---BCP $12,000 === BC $23,000 ----- 04/2014
CHASE SLATE $5,700 === 12/2013
BoA 123 $6000 === 12/2013
Barclay Rewards $1500 == 12/2013
Contributor
Posts: 247
Registered: ‎12-01-2013
0

Re: knowing credit line before approval?


Fico2Go wrote:
Thats sad. And unfair.

Consumers should know what we are buying before spending our HPs.

The creditors have a major advantage in suppressing everyones scores this way.

How do you expect the creditor to know what they can offer you before they pull your CRs?

Last App 12/8/13 - BoA Better Balance Rewards

Wallet: Discover IT $4500, Chase Freedom $3k, Citi Forward $3000, AmEx BCE $2k

Sock Drawer: Citi Diamond Preferred $10500, BoA BBR $7500, Citi Platinum Select $2200, AmEx Clear $2k, J.Crew $1850, US Bank Platinum $500

12/2013: TU = 763, EX = 791, EQ = ??
Established Contributor
Posts: 961
Registered: ‎12-05-2013
0

Re: knowing credit line before approval?

Well banks dont know how much u want to buy a house, do they?

I would argue that credit companies could do the same by letting consumers decide how much credit they need. Then they can use whatever algorithm they want to decide approval or denial.

But at least we would know what limit we are applying for and if not approved ---- let us the consumer decide if we want to change the amount we need.

Heck treat the credit card process like a personal loan where we decide how much loan we want.
Discover IT $19,000 == 12/2013
AMEX 12/2013 ---BCP $12,000 === BC $23,000 ----- 04/2014
CHASE SLATE $5,700 === 12/2013
BoA 123 $6000 === 12/2013
Barclay Rewards $1500 == 12/2013
Established Contributor
Posts: 961
Registered: ‎12-05-2013
0

Re: knowing credit line before approval?

Bottom line is I dont want to apply for a credit, get a HP, then get a CL I dont want.

Then have to keep this TL on my CR for ten years even if I decide I dont want it.

Discover IT $19,000 == 12/2013
AMEX 12/2013 ---BCP $12,000 === BC $23,000 ----- 04/2014
CHASE SLATE $5,700 === 12/2013
BoA 123 $6000 === 12/2013
Barclay Rewards $1500 == 12/2013
Frequent Contributor
Posts: 379
Registered: ‎03-31-2012
0

Re: knowing credit line before approval?


Fico2Go wrote:
Well banks dont know how much u want to buy a house, do they?

I would argue that credit companies could do the same by letting consumers decide how much credit they need. Then they can use whatever algorithm they want to decide approval or denial.

But at least we would know what limit we are applying for and if not approved ---- let us the consumer decide if we want to change the amount we need.

Heck treat the credit card process like a personal loan where we decide how much loan we want.

I believe both mortgage and CCC do the same thing.  

 

Consumer:

 

I would like to buy a house;

 

Broker:

 

Let me run your credit so I can see what you are approved for with our bank.

 

CCC;

 

consumer:

 

I would like to have your CC.

 

CCC

 

Let me run your credit to see what you qualify for with our bank.

 

A HP basically shows other banks how often you are looking for credit.  Which person would you lend money to if need be?

 

Person 1:

 

A friend who asked you, and 25 of your friends for money, and most in the same week

 

Person 2;

 

Someone that asked you for money, and has not asked anyone for money in the last 3 years. 

 

Rapid search for additional credit is red flag, and shows a need for rapid funds.  This could be a sign that something is wrond in their financial life.  

Established Contributor
Posts: 961
Registered: ‎12-05-2013
0

Re: knowing credit line before approval?

And yet 100 inquiries for a home loan in two weeks period is counted as one?

But 100 inquiries for cc in two weeks can drop your 800 score to 500?

Discover IT $19,000 == 12/2013
AMEX 12/2013 ---BCP $12,000 === BC $23,000 ----- 04/2014
CHASE SLATE $5,700 === 12/2013
BoA 123 $6000 === 12/2013
Barclay Rewards $1500 == 12/2013

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