topic Re: Does my credit score even matter when applying? in Credit Cards

Does my credit score even matter when applying?

Anonymous — Tue, 29 Jul 2014 14:41:00 GMT

I ask because after browsing this site for awhile I've read a few people state that a credit score doesnt matter and shouldnt be a focal point. While I would LOVE to not focus on it if a credit score is a significant factor in whether or not I'm approved for a credit card or wasting HP inquiries then yes I'm going to focus on it and do my best to improve it. If lenders stop focusing on the score then I'll gladly follow along, until then I'd like to know if it matters. Then I read different companies use different scoring models, 04 / 08, they make up their own scoring models etc.. which adds to the mystery bc now I'm not sure if what they see is anything like what I see or if my information is all wrong. Having said that I have a couple questions.

What scoring model does myfico.com currently use?

What scoring model do most lenders use (Amex, Barclays, Discover, Citi, Chase...)? I'm sure it differs but it would be nice to at least have an idea since I'm wondering if the TU standard I purchased and EX score watch are even relevant at this point or if this is the actual score information companies view when I hit apply.

If I ever happened to get denied for a credit card would the denial letter include the score the company viewed when they pulled my report so I could compare it to what I see from myfico.com? Since this is the only place to get a "true" FICO score.......or so I thought

Forgive me if these are repeat questions, feel free to include links to other threads that cover these topics if you wish. Was looking for current answers since things can change, a lot of what comes up when I search is information from 2011, 2012ish. Thanks!

Re: Does my credit score even matter when applying?

BluePoodle — Tue, 29 Jul 2014 14:54:29 GMT

I am not sure where "scores don't matter" but I would assume it is for those of us who are not planning to apply for anything but still very focused and X score goal. Or not wanting to take a HP because we want to maintain a certain score, when in reality the scores are for the credit application process.

The other side of the coin is where the scores are reasonably good but a person could still be denied. For thin files, or too many new accounts, HP's etc. That would be like my daughter who has a high score (compared to me) in 715's range but short AAoA and payment history and low income. So even though she is close to prime scores for mortagage, etc...she does not have a thick enough file or time to gaurantee she would be approved for large loans.

Those are just my thoughts on the blanket statement. Reality is that scores do matter but so do other factors.

Re: Does my credit score even matter when applying?

Kenny — Tue, 29 Jul 2014 14:59:27 GMT

Good post, BluePoodle. Agree with all you said. Scores matter, but aren't the end all.

Re: Does my credit score even matter when applying?

mongstradamus — Tue, 29 Jul 2014 15:00:16 GMT

@BluePoodle wrote:
I am not sure where "scores don't matter" but I would assume it is for those of us who are not planning to apply for anything but still very focused and X score goal. Or not wanting to take a HP because we want to maintain a certain score, when in reality the scores are for the credit application process.

The other side of the coin is where the scores are reasonably good but a person could still be denied. For thin files, or too many new accounts, HP's etc. That would be like my daughter who has a high score (compared to me) in 715's range but short AAoA and payment history and low income. So even though she is close to prime scores for mortagage, etc...she does not have a thick enough file or time to gaurantee she would be approved for large loans.

Those are just my thoughts on the blanket statement. Reality is that scores do matter but so do other factors.

Whats actually on your credit reports i think matters more than scores. Since scores can fluctuate due to how different scoring models factor certain things. In general tho keep utilization fairly low, pay on time, and have no baddies, if you do those things you should be in good shape imo.

Re: Does my credit score even matter when applying?

Anonymous — Tue, 29 Jul 2014 15:05:19 GMT

Ok so the score matters but the reasons that contribute to the score are key. I guess. smh I know this is new to me but a lot of what goes on in this rebuilding process makes my brain hurt. Doesnt help that EX / EQ / TU all seem to have their own way of coming up with a score or determining what is or isnt good based on the same information. The way some issues in my report are interpreted by each makes my eyebrow raise Guess as long as I make consistent on time payments, maintain a low utilization, chill in my garden to build a decent history and dont go on a mad app spree the score/information will gradually improve.

Re: Does my credit score even matter when applying?

Anonymous — Tue, 29 Jul 2014 15:06:06 GMT

Mongstradamus were you reading my mind?

Re: Does my credit score even matter when applying?

PlasticOrPlastic — Tue, 29 Jul 2014 15:15:11 GMT

Add a BK7 to your report and see how much your scores matter...there is a ton more factored into an approval than simply a credit score. I hit 705 credit score and still wasnt able to get certain cards or credit products, and I'm still getting pre approvals for credit cards I've never heard of with amazing interest rates of 25%-38.99%. So to answer your question they matter but aren't the only factor for an approval.

Re: Does my credit score even matter when applying?

Kenny — Tue, 29 Jul 2014 15:16:47 GMT

@CallaLilyLover wrote:
Ok so the score matters but the reasons that contribute to the score are key. I guess. smh I know this is new to me but a lot of what goes on in this rebuilding process makes my brain hurt. Doesnt help that EX / EQ / TU all seem to have their own way of coming up with a score or determining what is or isnt good based on the same information. The way some issues in my report are interpreted by each makes my eyebrow raise Guess as long as I make consistent on time payments, maintain a low utilization, chill in my garden to build a decent history and dont go on a mad app spree the score/information will gradually improve.

Of course. Your score is only a reflection of what's on your report. So of course paying on time, keeping utilization low, and keep accounts all go to show that you are a reliable customer. While it may seem confusion for the most part it shouldn't be too confusing. Just focus on getting rid of the baddies if one has them and your score/profile is bound to be headed to prime land with consistent, positive usage of credit.

Re: Does my credit score even matter when applying?

Kenny — Tue, 29 Jul 2014 15:17:27 GMT

@PlasticOrPlastic wrote:
Add a BK7 to your report and see how much your scores matter...there is a ton more factored into an approval than simply a credit score. I hit 705 credit score and still wasnt able to get certain cards or credit products, and I'm still getting pre approvals for credit cards I've never heard of with amazing interest rates of 25%-38.99%. So to answer your question they matter but aren't the only factor for an approval.

Exactly!

Re: Does my credit score even matter when applying?

mongstradamus — Tue, 29 Jul 2014 15:18:10 GMT

@CallaLilyLover wrote:
Mongstradamus were you reading my mind?

great minds think alike :-)

Re: Does my credit score even matter when applying?

Anonymous — Tue, 29 Jul 2014 15:25:11 GMT

PlasticOrPlastic thats understandable. I know that certain factors have a larger impact on scores than others. Pass on adding the BK7, no thanks Guess its just a little frustrating to not have a real understanding of what a computer considers as approval worthy. There's no explaining to a computer once the apply button is hit. Its decision is based on pre-determined requirements, of which differ and could be anything. I guess thats what recon was made for. Doubt ill continue to pay monthly for these myfico reports. But ill check them again in 6 months

I meant apply button not approval. I need some coffee lol Thanks everyone! Enjoy your day

Re: Does my credit score even matter when applying?

Open123 — Tue, 29 Jul 2014 15:24:27 GMT

Scores matter on automatic approvals, but less so during a manual review.

Far and away the most important factor is to have a record of using credit and paying it on time. Meeting your obligations 100% of the time without any derogs will result in high scores and approvals for any CC, except for larger fixed loans which will dwelve deeper and examine debt to income, assets, etc...

Re: Does my credit score even matter when applying?

PlasticOrPlastic — Tue, 29 Jul 2014 15:59:41 GMT

@CallaLilyLover wrote:
PlasticOrPlastic thats understandable. I know that certain factors have a larger impact on scores than others. Pass on adding the BK7, no thanks Guess its just a little frustrating to not have a real understanding of what a computer considers as approval worthy. There's no explaining to a computer once the apply button is hit. Its decision is based on pre-determined requirements, of which differ and could be anything. I guess thats what recon was made for. Doubt ill continue to pay monthly for these myfico reports. But ill check them again in 6 months

I meant apply button not approval. I need some coffee lol Thanks everyone! Enjoy your day

Good plan, wish I wouldnt have gotten to that point but for me it was a much needed learning experience. The computer software deployed to make these decisions is very complex and unpredictable, which is exactly what they want to keep it proprietary for each lenders credentials. As an example I had a Best Buy card that switched to CITI, I called and asked for a CLI ($500 starting limit for years), no go with a HP. I closed the account, and shortly after re applied...instant approval for $2000, with no notable changes to my report, and actually my score was down 15 points from my HP CLI request. I still cannot get a CITI revolver though, spending 2k at BB and not paying the bill is apparently not a big deal but dont do it on the diamond preferred...?...I stopped trying to see any logic.

Re: Does my credit score even matter when applying?

Anonymous — Tue, 29 Jul 2014 16:27:06 GMT

*throws up hands* Mind boggling! But congrats on the 2k instant approval

Re: Does my credit score even matter when applying?

Revelate — Tue, 29 Jul 2014 17:44:56 GMT

@PlasticOrPlastic wrote:
Add a BK7 to your report and see how much your scores matter...there is a ton more factored into an approval than simply a credit score. I hit 705 credit score and still wasnt able to get certain cards or credit products, and I'm still getting pre approvals for credit cards I've never heard of with amazing interest rates of 25%-38.99%. So to answer your question they matter but aren't the only factor for an approval.

I think that's more of a factor that once you get on one of the bulk mailing lists it's nearly impossible to get off them.

I got spam from various "tax relief" organizations (sigh, effectively scams, DIY FTW) when I got I got a silly tax lien added back in Nov '13; still got them when the lien was released (paid) and currently get them now that the lien is off my report though they have been reduced in volume as time goes on thankfully. Waste of trees.

Likewise I still get a few similar mailings from places like Credit One, and Springleaf loans, and a few other subprime vendors from when I was building back in 2011 and picked up a deep subprime loan from Cashcall... they've always gone in the recycling bin after opening them for entertainment value.

Re: Does my credit score even matter when applying?

Revelate — Tue, 29 Jul 2014 17:52:50 GMT

@Open123 wrote:
Scores matter on automatic approvals, but less so during a manual review.

Far and away the most important factor is to have a record of using credit and paying it on time. Meeting your obligations 100% of the time without any derogs will result in high scores and approvals for any CC, except for larger fixed loans which will dwelve deeper and examine debt to income, assets, etc...

This.

To try to address the OP: I think what we've said about not focusing on scores was simply confusingly presented.

People on this forum tend to get caught up in every little positive and negative in their credit score, and that is a route to insanity unfortunately. As a result many have simply suggested focusing on the underlying report data as that is relatively optimizable for anyone, and a pretty report will lead to a pretty score regardless of algorithm selected.

As others have pointed out, that's not to say that FICO is not important on the lending side, but except in a few cases typically the FICO underwriting hurdle isn't that hard to get over as it's purposely set low so that other compensating factors can be brought into play. Shouldn't discount the algorithms as being so simplistic that they're going to go on score alone: while it is one factor, it is nowhere close to the only one as more and more of the underwriting decisions have been pushed into the infrastructure where frankly it's cheaper than a human underwriter and it's not hard to programatically dissect a credit report and then do any sort of more sophisticated analysis on it rather than a simple resultant FICO score... but FICO is easy and as such, it's entirely likely some lenders will use that nearly exclusively in their algorithms most likely.

Re: Does my credit score even matter when applying?

PlasticOrPlastic — Tue, 29 Jul 2014 17:52:38 GMT

@Revelate wrote:
@PlasticOrPlastic wrote:
Add a BK7 to your report and see how much your scores matter...there is a ton more factored into an approval than simply a credit score. I hit 705 credit score and still wasnt able to get certain cards or credit products, and I'm still getting pre approvals for credit cards I've never heard of with amazing interest rates of 25%-38.99%. So to answer your question they matter but aren't the only factor for an approval.
I think that's more of a factor that once you get on one of the bulk mailing lists it's nearly impossible to get off them.

I got spam from various "tax relief" organizations (sigh, effectively scams, DIY FTW) when I got I got a silly tax lien added back in Nov '13; still got them when the lien was released (paid) and currently get them now that the lien is off my report though they have been reduced in volume as time goes on thankfully. Waste of trees.

Likewise I still get a few similar mailings from places like Credit One, and Springleaf loans, and a few other subprime vendors from when I was building back in 2011 and picked up a deep subprime loan from Cashcall... they've always gone in the recycling bin after opening them for entertainment value.

I always open them myself Revelate, it is quite interesting my DG says "whats the interest on that one?" she knows exactly what page I'm looking for. I had a few lates on a car loan back in 2006, still get offers to refi before repo. I've had like 5 cars since then and was no where near repo...waste of trees is right!

Re: Does my credit score even matter when applying?

bdhu2001 — Tue, 29 Jul 2014 18:15:13 GMT

@CallaLilyLover wrote:
Ok so the score matters but the reasons that contribute to the score are key. I guess. smh I know this is new to me but a lot of what goes on in this rebuilding process makes my brain hurt. Doesnt help that EX / EQ / TU all seem to have their own way of coming up with a score or determining what is or isnt good based on the same information. The way some issues in my report are interpreted by each makes my eyebrow raise Guess as long as I make consistent on time payments, maintain a low utilization, chill in my garden to build a decent history and dont go on a mad app spree the score/information will gradually improve.

You're absolutely on the right track and the information from Relevate and Mongstradamus is spot on; but since you mentioned the various CBAs, are all of them reporting the same information and in the same way. For example: One of the CBAs is showing my second mortgage as revolving credit. I know that if I get that corrected, it will help my score with that CBA. I haven't done so, because my score is sufficient for the Mortgage I'm going for and I know that having a dispute, while going through the loan process can cause unnecessary delays or kinks.

Thus, don't just verify that it's the same information, pay attention to how it's being reported or listed too.

Re: Does my credit score even matter when applying?

Anonymous — Tue, 29 Jul 2014 18:28:03 GMT

bdhu2001, or anyone else who might know, theres one thing that stands out to me as puzzling when I view all three of my reports. My student loans are in two accounts that total 6k. All three bureaus list them as in good standing, deferred status with payments set to start January 2016. But theres a total monthly payments line thats $0 for TU and EQ but listed as $100 ($50 per account) for EX. Should I be concerned about this discrepency? Its still listed as in good standing for EX but kind of odd that it was somehow reported differently to only one out of the three. Also I have no idea how the monthly payment amount was formulated. I never set up monthly payments or even requested the deferment, I'm still in school.

Re: Does my credit score even matter when applying?

Revelate — Tue, 29 Jul 2014 19:35:26 GMT

@CallaLilyLover wrote:
bdhu2001, or anyone else who might know, theres one thing that stands out to me as puzzling when I view all three of my reports. My student loans are in two accounts that total 6k. All three bureaus list them as in good standing, deferred status with payments set to start January 2016. But theres a total monthly payments line thats $0 for TU and EQ but listed as $100 ($50 per account) for EX. Should I be concerned about this discrepency? Its still listed as in good standing for EX but kind of odd that it was somehow reported differently to only one out of the three. Also I have no idea how the monthly payment amount was formulated. I never set up monthly payments or even requested the deferment, I'm still in school.

Nope, it's not used in the FICO algorithms, and while it may be used by lenders in a DTI calculation, if they choose they will impute the theoretical payment and apply that as a substitute for the actual payment (much like they do for rent if someone is living at parent's home gratis as an example).

When the loans come out of deferrement they'll be updated accordingly, self resolving issue that isn't harming you currently.