What is pyramiding debt or credit?

[dharalex]

I heard this term used in reference to a reason to decline an appllicant for credit. Can anyone give me any insight?

[namvet]

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@dharalex wrote:

I heard this term used in reference to a reason to decline an appllicant for credit. Can anyone give me any insight?

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It is adding debt on top of other debt without paying off the initial debt!

[dharalex]

So is pyrimiding credit having too much credit without using it?

[namvet]

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@dharalex wrote:

So is pyrimiding credit having too much credit without using it?

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Nope!  It's adding debt on top of debt too quickly!

[dharalex]

I see said the blind man! Thanks so much or replying!

[LisaPA]

I've only ever heard that phrase used by PenFed. They use that term when you have too many inquiries (according to them) and they think you're trying to shuffle your debt around rather than pay it off.

[dharalex]

Yes, I read about it on a PedFed thread lol!

[XxRaVeNxX]

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@namvet wrote:

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@dharalex wrote:

So is pyrimiding credit having too much credit without using it?

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Nope!  It's adding debt on top of debt too quickly!

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 This is a false statement.

[Walt_K]

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@XxRaVeNxX wrote:

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@namvet wrote:

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@dharalex wrote:

So is pyrimiding credit having too much credit without using it?

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Nope!  It's adding debt on top of debt too quickly!

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 This is a false statement.

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Why is it false?  That's pretty much what pyramiding is.  I suppose you could say it is borrowing new funds in rapid succession to pay off old debt, so not really adding debt on top of debt, but using debt to pay debt.  In any event, it's unsustainable, and that's what scares some lenders when they see a lot of new inquiries/accounts.

[namvet]

Ok here is a more official answer about pyramiding debt/credit.  Source info.com "lenders scan cc apps for pyramiding debt.  The term pyramiding debt means two things: Too many credit cards/too much credit available.  Lenders see pyramiding debt as a potential scheme to spread credit over all the credit cards, keeping specific balances low, but spending more than their incomes."   I may have over simplified my first post on this subject.