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Valued Contributor
Posts: 1,673
Registered: ‎11-11-2012
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Re: "Too much available credit"?...Just didn't sound right...

As we see from several people here (Hi young...!) the CCs DO still continue to issue cards to people with these (reported) profiles.  Wonder why.  "Maybe he will change"

or is it just most of them really follow some form of mechanical FICO scoring, and if you meet the score, we'll take you.

 

It might be that the marginal cost of new users is very small, if we have e-statements etc, so it makes sense just to grant the application than spend time worrying about profitability (once the score has given us some assurance against default).

 

If so, maybe we should either set up a CC company that does marginally better by screening out such non-performers, or set up a consulting company that does such screening for issuers!

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Senior Contributor
Posts: 4,694
Registered: ‎02-23-2011
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Re: "Too much available credit"?...Just didn't sound right...


bs6054 wrote:

If so, maybe we should either set up a CC company that does marginally better by screening out such non-performers, or set up a consulting company that does such screening for issuers!


If you had a risk modelling structure that actually worked in a way where empirical data substantiated it's effectiveness, to say 1/2 to a full standard deviation below the industry average for "loss" accounts, then I think you could have a start-up company with huge potential.

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