topic What is pyramiding debt or credit? in General Credit Topics

What is pyramiding debt or credit?

Anonymous — Fri, 10 Feb 2012 01:40:08 GMT

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

Re: What is pyramiding debt or credit?

namvet — Fri, 10 Feb 2012 01:51:36 GMT

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

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

Re: What is pyramiding debt or credit?

Anonymous — Fri, 10 Feb 2012 01:58:58 GMT

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

Re: What is pyramiding debt or credit?

namvet — Fri, 10 Feb 2012 02:15:55 GMT

@Anonymous wrote:
So is pyrimiding credit having too much credit without using it?

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

Re: What is pyramiding debt or credit?

Anonymous — Fri, 10 Feb 2012 02:41:12 GMT

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

Re: What is pyramiding debt or credit?

Anonymous — Fri, 10 Feb 2012 02:55:47 GMT

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.

Re: What is pyramiding debt or credit?

Anonymous — Fri, 10 Feb 2012 03:10:16 GMT

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

Re: What is pyramiding debt or credit?

XxRaVeNxX — Tue, 23 Oct 2012 17:09:15 GMT

@namvet wrote:
@Anonymous wrote:
So is pyrimiding credit having too much credit without using it?
Nope! It's adding debt on top of debt too quickly!

This is a false statement.

Re: What is pyramiding debt or credit?

Walt_K — Wed, 24 Oct 2012 00:17:17 GMT

@XxRaVeNxX wrote:
@namvet wrote:
@Anonymous wrote:
So is pyrimiding credit having too much credit without using it?
Nope! It's adding debt on top of debt too quickly!
This is a false statement.

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.

Re: What is pyramiding debt or credit?

namvet — Wed, 24 Oct 2012 01:00:23 GMT

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.

Re: What is pyramiding debt or credit?

Walt_K — Wed, 24 Oct 2012 01:06:28 GMT

@namvet wrote:
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.

I don't actually think you were wrong the first time. The applications/adding new accounts are not pyraminding debt. It's the actual adding of debt to pay off previous debt. A sudden surge in applications/addition of new accounts can be a warning sign that you might be pyramiding debt, but just applying for new credit is not pyramiding.