topic Re: Examples of credit being "too good" for something? in General Credit Topics

Examples of credit being "too good" for something?

Anonymous — Tue, 25 Apr 2017 19:30:27 GMT

As a general consensus on these boards, we all more or less agree that credit scores of 740 or 760 and above are "just as good" as a top 850 score. By just as good, I mean someone with a 760 score 99 times out of 100 can obtain the same products with the same terms as someone with an 850 score be it a credit card, mortgage at the best interest rate, etc. Of course the higher the score the better though, as it provides a buffer should an adverse scoring event such as higher utilization, inquiries/new accounts or anything else be introduced to the credit profile.

My question though, is whether or not credit can be "too good" in certain instances? By "too good" I mean has anyone encountered any examples where greater scores could possibly have resulted in a less favorable credit result? Of course any examples provided will be pure speculation, as a potential credit is never going to give the reason, "your credit is too good..." denial for something. At least I wouldn't think so, anyway.

I can think of 2 examples of what I'm talking about.

Last summer when Blispay was the flavor of the month around here, a ton of people on the forum were applying. There were a bunch of people getting denied that had 800+ scores, where those with scores in mid 600's to low 700's were being approved. There was some speculation that perhaps Blispay felt that those profiles were "too good" in that those customers may not be as profitable as they may never pay a penny of interest or carry balances like someone with a slightly weaker profile may.

Another example. My father last year applied for the same credit card as me a month or so after I did and got approved for it. His profile was significantly stronger than mine. While we both had 1% utilization at the time of applying, his file was much thicker, much older, was squeaky clean (I had multiple accounts with baddies) and he hadn't applied for credit in a very long time so he probably had no inquries where I had a few. Our incomes were also similar. Due to his much stronger profile, his scores were about 100 points higher than mine as he was in the 830's and I was in the 730's. Not only was I approved for the card with a higher SL than him, I was able to just about double my credit limit with SP CLIs over 6 months where he was only able to get one CLI during that time. I completely understand that his profile and mine are obviously vastly different and that there are tons of factors that can be considered here, but this is just an observation.

I'd like to hear if anyone else has encountered any instances of credit possibly being "too good" or any other opinions on this subject as I think it could be a fun discussion.

Re: Examples of credit being "too good" for something?

Anonymous — Tue, 25 Apr 2017 21:38:46 GMT

I think there was a discussion on the forum about Credit One turning down people with higher scores. If I recall, somehow you could get your credit score for free as a result. I've no doubt my scores are outside their demographic but even the most remote possibility of being approved scares me...I'll never try.

Myself...never been turned away based on score good or bad. It's true that a 800+ won't really get you anything extra.
I also think an often overlooked aspect of have a higher score is having that cushion. For example I no longer worry about reported utilization. It doesn't matter if all my acct report a bal or not at the end of the day I'm still getting the best rates.

Re: Examples of credit being "too good" for something?

Anonymous — Tue, 25 Apr 2017 21:55:33 GMT

I could see a predatory lender like Credit One turning down those that they think they wouldn't make much money on because their profile is too strong to be the type to succumb to their BS.

Re: Examples of credit being "too good" for something?

Revelate — Wed, 26 Apr 2017 12:21:13 GMT

@Anonymous wrote:
I think there was a discussion on the forum about Credit One turning down people with higher scores. If I recall, somehow you could get your credit score for free as a result. I've no doubt my scores are outside their demographic but even the most remote possibility of being approved scares me...I'll never try.

Myself...never been turned away based on score good or bad. It's true that a 800+ won't really get you anything extra.
I also think an often overlooked aspect of have a higher score is having that cushion. For example I no longer worry about reported utilization. It doesn't matter if all my acct report a bal or not at the end of the day I'm still getting the best rates.

This is the example I remember, but there's a certain wisdom for simply turning down customers who aren't in your target demographic and not going through the cost of UW and account maintenance.

I'm certain it's happened with other lenders, you dirty 800's!

Re: Examples of credit being "too good" for something?

Anonymous — Mon, 01 May 2017 09:13:15 GMT

I'm in a similar situation. Once I surpassed the 800 point mark, CL increases were extremely rare. I now have a perfect 850 score (FICO 8 Experian) and not one of my cards has issued a CL increase in over a year. In fact, the last one I received was 15 months ago for a measly $2k bump on a $5k CL. I asked Amex and Discover why they never soft review my account for increases, they can't seem to give me a reason and encouraged me to ask for one. It's probably because I never carry a balance and haven't paid a dime in interest to any of my cards in well over 5 years. I refuse to request any manual increases since I don't want the hard inquries. AAoA is 17-18 yrs, oldest account 21 years.

Re: Examples of credit being "too good" for something?

Anonymous — Mon, 01 May 2017 23:53:50 GMT

@Anonymous wrote:
I'm in a similar situation. Once I surpassed the 800 point mark, CL increases were extremely rare. I now have a perfect 850 score (FICO 8 Experian) and not one of my cards has issued a CL increase in over a year. In fact, the last one I received was 15 months ago for a measly $2k bump on a $5k CL. I asked Amex and Discover why they never soft review my account for increases, they can't seem to give me a reason and encouraged me to ask for one. It's probably because I never carry a balance and haven't paid a dime in interest to any of my cards in well over 5 years. I refuse to request any manual increases since I don't want the hard inquries. AAoA is 17-18 yrs, oldest account 21 years.

Interesting. What are you total credit limits and how about your income? Those are the only 2 things I would think could be limiting factors on a virtually perfect file.

Re: Examples of credit being "too good" for something?

Adidas — Tue, 02 May 2017 00:15:12 GMT

Octopus, FYI CLI requests from Discover and AmEx have been soft pulls in my experience. So if they are telling you they didn't know why you haven't gotten one automatically then you might actually request it!

Re: Examples of credit being "too good" for something?

Anonymous — Tue, 02 May 2017 00:50:00 GMT

Hi Octopus. Many CC issuers do soft pulls for CLI requests. Here is a nice guide that goes through some of the major issuers and indicates whether they do soft or hard pulls.

http://www.doctorofcredit.com/credit-cards/which-credit-card-companies-do-a-hard-pull-for-a-credit-limit-increase/

Amex and Discover both have soft pull options for consumer initiated CLI requests, as you'll see.

Of course your CLs may be far higher than you really will ever use, so maybe it doesn't matter.

Re: Examples of credit being "too good" for something?

Anonymous — Tue, 02 May 2017 01:05:05 GMT

Hi BBS. If trended data end up becoming a reliable part of the CRA datasets, then we'll certainly see some of what you are talking about. (And indeed it's possible that some issuers are doing some of this now.)

That is, a person may end up having a great 300-850 score -- and remember that the score traditionally measures only the risk of the person becoming severely delinquent, not whether he is profitable to a CC issuer -- but the trended data show him as a person who generates very little money in swipe fees and no money whatsoever in interest. That would be sombody like me. My FICO 8 and 9 scores are in the 820s but I make the CC issuers negative revenue owing to my low spending, bonus chasing, and refusal to ever carry a balance.

Re: Examples of credit being "too good" for something?

sarge12 — Tue, 02 May 2017 01:10:26 GMT

BBS...Often the very thing that gets one a high credit score will result in lower chance of CLI for sure...low utilization...It increases a score, but creditors do not see the need to increase the limit for a customer that has never even used 20% of their current limit. They are wise to the fact that people are requesting it only to help their score, not because they actually need the extra credit. I have a very hard time getting CLI's from any of my current creditors since I always PIF and have low utilization...I do however understand the issuers point..it is not due to high scrore, but both high score and lack of needing CLI are both due to low utilization.

Re: Examples of credit being "too good" for something?

sarge12 — Tue, 02 May 2017 01:12:33 GMT

@Anonymous wrote:
Hi BBS. If trended data end up becoming a reliable part of the CRA datasets, then we'll certainly see some of what you are talking about. (And indeed it's possible that some issuers are doing some of this now.)

That is, a person may end up having a great 300-850 score -- and remember that the score traditionally measures only the risk of the person becoming severely delinquent, not whether he is profitable to a CC issuer -- but the trended data show him as a person who generates very little money in swipe fees and no money whatsoever in interest. That would be sombody like me. My FICO 8 and 9 scores are in the 820s but I make the CC issuers negative revenue owing to my low spending, bonus chasing, and refusal to ever carry a balance.

What he said...my situation also. +100

Re: Examples of credit being "too good" for something?

Anonymous — Tue, 02 May 2017 01:33:09 GMT

Sarge and CGID, good replies and I agree with what you both are saying.

One sort of X-factor that needs to be taken into consideration, though, is what happens when someone with great credit scores encounters adversity. I never pay a penny of interest either, just like the two of you. But, if something ever came up... some sort of life event that blind-sided me and I had no choice BUT to expand on my 1% utilization, I could at some point be forced to carry a balance out of necessity. Sarge I know financially you are in a place in your life where you're equipped to likely get through one of these times without having to go to the well, but I wouldn't be. The question I have then is how would we predict that someone with an 800's score would fare against an equal event to someone with say a 650 score? Would we assume that the 800+ person in this otherwise equal example would be less of a risk to bring their accounts current again in at some point in the future? If so, they could potentially be a profitable customer (at some point) with little risk in the meantime until some event like that may happen.

I think CLIs on stellar profiles sort of come down to the creditor. I agree that when you look at a person that's got 800+ scores that's got CCs with high limits that never report more than 1% utilization there's really no reason for a creditor to extend more credit. I'm sure this is the reason that creditors don't extend more credit to these individuals. Conversely though, there are plenty of examples of this same person getting auto-CLIs out of the blue for no reason. Or, creditors like Discover that will let someone SP their way from a $5k SL to $50k in 1.5 - 2 years when they never report more than 1% on the card and never take their balance outside of single-digit utilization at any given moment.

Re: Examples of credit being "too good" for something?

sarge12 — Tue, 02 May 2017 01:44:35 GMT

BBS...I guess it depends on how you use Discover...they seem to not be very generous if their card is not one of your go to cards. They are a jealous lender in my book, and at least for me, the stingiest of all my cards. Current CL is 6200 with them, and last time they approved CLI, the increase was only 400 dollars, I think. Definately my stingiest creditor by far, so I almost never use their card as a result, so it does work both ways. Discover IT...the IT stands for the credit limit....It's Tiny.

Re: Examples of credit being "too good" for something?

Anonymous — Tue, 02 May 2017 06:27:08 GMT

BrutalBodyShots,

Income slightly over ~$100k, total credit limits approx $125k. Roughly a dozen revolving card accounts, and one $30k 5 yr car loan that's on pace to be paid off 3 years early. 3 of my cards are used for regular monthly purchases totalling $2-3k monthly, the rest are used sparingly for a small <$100 purchase each month. No card ever carries a monthly balance, I actually pay them off immediately in full even before the statement closing date. Some cards can see up to 5-6 payments in a calender month as I don't like balances to accrue.

Re: Examples of credit being "too good" for something?

Anonymous — Tue, 02 May 2017 06:43:16 GMT

Adidas,

Great info,I will definitely look into this!

CreditguyInDixie,

The guide looks very rich on information, thanks for posting the link. I'm not in need of a CL increase as I barely charge 2-3% of my available credit each month. But I do think it's very good to have as high a CL as possible in the unforseen event your utilization may temporarily spike.

Re: Examples of credit being "too good" for something?

Anonymous — Tue, 02 May 2017 07:30:01 GMT

Sarge,

I agree Discover is very stingy, at least in my case. My CL was opened with a $14.5k line 11 years ago , it has since peaked @ $16k. The last increase was 3 years ago for just $400 as well, nothing since. It's one of my go-to cards, I use it at least 15-20 times a month and rack up nearly a $1k in monthly charges so they're at least making something on my swipe fees.

Amex has been even stingier. I opened that account in '02 with an $8k limit, they quickly bumped me up to $25k. I got into some serious financial debt in '03-04, maxing out most of my cards. When the financial crisis hit in '08, Amex demanded I pay off the balance in full or risk closure of the account as I was only paying slightly over the minimum. I managed to BT all but $5.7K of Amex to WAMU (now Chase). They left the card open but slashed the CL down to the $5.7K balance still leaving my card maxed out. I managed to totally get out debt in 2010-11, all cards were paid off. Despite drowning in debt at the time, I never once missed a payment or defaulted on any of my accounts.

Amex is my 2nd go-to card, I charge about $800/mo, however the CL has remained at $5.7K since '08. I wonder if regardless of my 850 FICO score, they have an internal red flag of the past. BOFA and CAP1 did a similar thing as Amex back then on 2 of my cards, and like Amex neither has raised my CL's since. Or maybe it's because I'm not really a "profitable" customer as has been discussed on this thread. On the other hand, I also have other cards which I opened well after I was totally debt free, 7-8 years old that have not seen increaess since inception.

Re: Examples of credit being "too good" for something?

Anonymous — Tue, 02 May 2017 11:53:57 GMT

Keeping with the theme of profitability I have noticed a trend, maybe its just me. When my scores where in the mid 700s I used to get a ton of mailers, like 3-4 a week. After my scores got up around 780 I was only getting a few mailers maybe 1-2 a month. As soon as my scores surpassed the upper 700s I haven't seen a single mailer for a credit card since. I'm definitely opted in as I will occasionally still receive offers for personal loans.

Anyone else have a similar experience?

Re: Examples of credit being "too good" for something?

sarge12 — Tue, 02 May 2017 11:59:19 GMT

@Anonymous wrote:
Sarge,
@I agree Discover is very stingy, at least in my case. My CL was opened with a $14.5k line 11 years ago , it has since peaked @ $16k. The last increase was 3 years ago for just $400 as well, nothing since. It's one of my go-to cards, I use it at least 15-20 times a month and rack up nearly a $1k in monthly charges so they're at least making something on my swipe fees.

Amex has been even stingier. I opened that account in '02 with an $8k limit, they quickly bumped me up to $25k. I got into some serious financial debt in '03-04, maxing out most of my cards. When the financial crisis hit in '08, Amex demanded I pay off the balance in full or risk closure of the account as I was only paying slightly over the minimum. I managed to BT all but $5.7K of Amex to WAMU (now Chase). They left the card open but slashed the CL down to the $5.7K balance still leaving my card maxed out. I managed to totally get out debt in 2010-11, all cards were paid off. Despite drowning in debt at the time, I never once missed a payment or defaulted on any of my accounts.

Amex is my 2nd go-to card, I charge about $800/mo, however the CL has remained at $5.7K since '08. I wonder if regardless of my 850 FICO score, they have an internal red flag of the past. BOFA and CAP1 did a similar thing as Amex back then on 2 of my cards, and like Amex neither has raised my CL's since. Or maybe it's because I'm not really a "profitable" customer as has been discussed on this thread. On the other hand, I also have other cards which I opened well after I was totally debt free, 7-8 years old that have not seen increaess since inception.

I, like you mentioned in previous post, generally make multiple payments on cards monthly and also usually pay before the statement cuts. It seems to be very common that this keeps us from recieving credit limit increases, but I will not change this behavior to get higher credit limits as higher unpaid balances tend to drive me crazy. I actually hate how long it takes for some pending charges to actually post. Many times the only reason I am waiting to pay a current balance is there are pending charges on the card that I am waiting to post so I can pay it all. Rarely is there ever a statement balance with a minimum payment showing. In my opinion this practice is best and causes me to treat the cards use more like non-credit card purchases, since it will very soon come out of my checking account. Study after study has proven that consumers are more likely to spend due to the fact that credit card charges come out of checking accounts in the future, and people are less likely to make unneccessary purchases when it comes out of currently available checking balance now. I admit that making sometimes 5 payments on a card in a month borders on OCD behavior, but it works for me. I also pay power bills and such as soon as they post a new bill.

Re: Examples of credit being "too good" for something?

Anonymous — Tue, 02 May 2017 12:03:31 GMT

@sarge12 wrote:
BBS...I guess it depends on how you use Discover...they seem to not be very generous if their card is not one of your go to cards. They are a jealous lender in my book, and at least for me, the stingiest of all my cards. Current CL is 6200 with them, and last time they approved CLI, the increase was only 400 dollars, I think. Definately my stingiest creditor by far, so I almost never use their card as a result, so it does work both ways. Discover IT...the IT stands for the credit limit....It's Tiny.

This is a perfect example of "YMMV" as I've had the exact opposite happen with me. If I put less than $100 through my Discover card they seem to not like it and don't give me CLIs. If I put $2000+ through the card, I've been given $4k CLIs. I just think there is no way to predict how Discover will react and that it's very profile-specific for whatever reason.

Re: Examples of credit being "too good" for something?

Anonymous — Tue, 02 May 2017 12:08:34 GMT

Octopus and sarge, both of you have indicated that you have a card or cards that you have not been able to get CLIs on. From what I saw though, neither of you indicated whether or not you are requesting (and getting denied) CLIs or if you both are referring to auto CLIs simply not happening.