topic Re: Approvals, rates, SLs and scores in General Credit Topics

Approvals, rates, SLs and scores

Snook_on_the_Line — Thu, 16 May 2024 01:30:58 GMT

So I remember reading somewhere that you have the right to know what was used against in a credit decision.

so does that mean that when you are approved for a credit card and they give you a small limit or a higher Apr than the best rate they offer on the card that the ccc has to provide you with the score and other info they used to make the approval?

Re: Approvals, rates, SLs and scores

JoeRockhead — Thu, 16 May 2024 09:24:51 GMT

Interesting question but, I believe that only applies when someone is declined.

Low, or toy limits are generally an indication that it was barely an approval. Generally this (along with higher apr) can be attributed to things like lower scores, a thin file (inexperienced), credit seeking, and perhaps the presence of derogatory information. All things that could be listed when someone is declined.

Re: Approvals, rates, SLs and scores

Thomas_Thumb — Thu, 16 May 2024 15:54:50 GMT

@Snook_on_the_Line wrote:
So I remember reading somewhere that you have the right to know what was used against in a credit decision.

so does that mean that when you are approved for a credit card and they give you a small limit or a higher Apr than the best rate they offer on the card that the ccc has to provide you with the score and other info they used to make the approval?

Absolutely NOT. Only if you are denied.

SLs are highly dependent on income as well as credit history. I believe the best APRs require whining in addition top tier credit scores - atleast with big banks. I went on a whining spree one week and successfully reduces APR on 3 bank cards.

Credit Unions may be more utilitarian with APRs.

Re: Approvals, rates, SLs and scores

JoeRockhead — Tue, 21 May 2024 11:15:28 GMT

@angela683h wrote:
Absolutely, you’re on the right track. When it comes to credit decisions, you do have the right to know the factors that were considered. If you’re approved for a credit card but with a lower limit or a higher APR than you were hoping for, the credit card company should provide you with the main reasons for their decision. This often includes the credit score they used and other relevant factors.

Best Regard,
angela683h

Just to clarify, the only time you have the right to know the factors that were considered is when there is a denial. While some lenders may tell you the reasons in regards to a reconsideration of a low starting limit, or high APR approval, they're under no obligation to disclose reasons for an approval, including the reason for a starting limit, or the reason for starting APR (low, or high in either case).

In regards to credit score disclosures, they're only required to disclose a credit score if it was a factor in a denial, or in regards to adverse action taken.

Re: Approvals, rates, SLs and scores

Horseshoez — Tue, 21 May 2024 11:26:28 GMT

@JoeRockhead wrote:
Just to clarify, the only time you have the right to know the factors that were considered is when there is a denial. While some lenders may tell you the reasons in regards to a reconsideration of a low starting limit, or high APR approval, they're under no obligation to disclose reasons for an approval, including the reason for a starting limit, or the reason for starting APR (low, or high in either case).

In regards to credit score disclosures, they're only required to disclose a credit score if it was a factor in a denial, or in regards to adverse action taken.

@JoeRockhead, just to level set, the post you responded to was from a spammer; notice the sneaky embedded link on the second line. Long story short, it is pretty safe to say anything that poster wrote is worthless and should be ignored.

Re: Approvals, rates, SLs and scores

JoeRockhead — Tue, 21 May 2024 11:41:42 GMT

@Horseshoez yes, I caught that... I'll often respond to these things simply for the benefit of other members who aren't as savvy as you, and may put some merit in what was posted.

Re: Approvals, rates, SLs and scores

Horseshoez — Tue, 21 May 2024 11:45:22 GMT

@JoeRockhead wrote:
Interesting question but, I believe that only applies when someone is declined.

Low, or toy limits are generally an indication that it was barely an approval. Generally this (along with higher apr) can be attributed to things like lower scores, a thin file (inexperienced), credit seeking, and perhaps the presence of derogatory information. All things that could be listed when someone is declined.

Regarding the low or toy limits, I'm thinking it depends upon the lender. Focusing on CapOne, they seem to prefer applicants with marginal credit ratings versus ones with clean files and high scores. Consider the following:

About 9 months after my Chapter 13 was discharged (and still showing on my reports) my FICO 8 scores were in the very low 600s and they approved me for a Quicksilver with a $3,000 starting limit which has since grown via auto-CLIs to $6,300.
About 18 months later my Chapter 13 had fallen off my reports, all 28 of my FICO scores were well into the 800s, and CapOne had been pestering me to apply for a SavorOne card for several months by sending me repetitive preapproval E-Mails. I took the bait, applied, and got a $2,000 limit; that was over two years ago and they have yet to grant me a CLI.

The SavorOne application/approval pushed me on to a different score card, my scores FICO 8 scores dropped just below 800, and then a new vehicle loan later that year dropped my scores down into the 760s; even still, Chase granted me a starting limit of $11,700 for a CSP two months after I got the new vehicle.

TL, DR; some lenders reward clean credit files and high scores, others seem to prefer you to have middling credit.

Re: Approvals, rates, SLs and scores

Thomas_Thumb — Tue, 21 May 2024 19:33:31 GMT

@Horseshoez wrote:
@
TL, DR; some lenders reward clean credit files and high scores, others seem to prefer you to have middling credit.

The only reward I ever got for a clean file and high scores was a 35% CLD .

Re: Approvals, rates, SLs and scores

Zoostation1 — Thu, 23 May 2024 04:02:29 GMT

@HorseshoezWhile not discounting your experience, I have a somewhat different take on Capital One. As a general rule, I don't think having high scores is necessarily a problem for Capital One, it's more about wanting to be your main squeeze. Maybe I'm wrong, but I don't think my ok but not great post BK7 scores, which would typically equate to a borderline/lower limit approval (if not denied) from mainstream/prime cards, helped my odds of getting decent limits with Cap One. I attribute it more to a combination of not having too many cards and having given Capital One a majority of my spend for most of my rebuild. I've got 6 cards...my rebuild started 11/21 with a secured Discover (It Chrome), and my C1 cards (accounting for 4 of the other 5) were opened 02/2022, 09/2022, 07/2023, 04/2024. Every month since opening the QS1 in Feb 2022, C1 has gotten a majority of my CC spend. That combined with no interest paid imo, is why C1 is ok with giving me better SLs ($2k, $3k, $10k, $20k) than my score may suggest.

Re: Approvals, rates, SLs and scores

Horseshoez — Thu, 23 May 2024 06:48:20 GMT

@Zoostation1 wrote:
@HorseshoezWhile not discounting your experience, I have a somewhat different take on Capital One. As a general rule, I don't think having high scores is necessarily a problem for Capital One, it's more about wanting to be your main squeeze. Maybe I'm wrong, but I don't think my ok but not great post BK7 scores, which would typically equate to a borderline/lower limit approval (if not denied) from mainstream/prime cards, helped my odds of getting decent limits with Cap One. I attribute it more to a combination of not having too many cards and having given Capital One a majority of my spend for most of my rebuild. I've got 6 cards...my rebuild started 11/21 with a secured Discover (It Chrome), and my C1 cards (accounting for 4 of the other 5) were opened 02/2022, 09/2022, 07/2023, 04/2024. Every month since opening the QS1 in Feb 2022, C1 has gotten a majority of my CC spend. That combined with no interest paid imo, is why C1 is ok with giving me better SLs ($2k, $3k, $10k, $20k) than my score may suggest.

@Zoostation1, my Quicksilver ($3,000 starting limit with FICO scores in the low- to mid-600s and only one other card in my portfolio) was getting pretty regular CLIs through about the 2.5 year mark (reaching a limit of $6,300); the card got heavy spend and I never once carried a balance. However, my SavorOne ($2,000 starting limit with FICO scores in the low- to mid-800s and only two other non-CapOne cards in my portfolio) has yet to get a single CLI in spite of numerous requests and heavy spend, and also never carrying a balance.

As much as I appreciate CapOne for giving me my first unsecured card after my Chapter 13 discharge, I've decided to move on; my Quicksilver has been replaced with my Freedom Unlimited ($23,700 starting limit) and my SavorOne has been replaced by my More Rewards ($30,000 starting limit); granted the two replacement cards aren't exactly one-for-one swaps in terms of features, but close enough for me.

Long story short, the combined limit for my two CapOne cards is currently $6,300 (both recently dropped in my sock drawer), while the two cards I have as replacements have a combined limit of $53,000. On a normal month-to-month basis, the credit limit for the CapOne cards was reasonably sufficient, but we just bought a new home and started renovations, and just this week alone I've put just over $25,000 on the two replacement cards.

Re: Approvals, rates, SLs and scores

Zoostation1 — Sat, 25 May 2024 10:29:41 GMT

@HorseshoezKiller SLs on those two cards! I've mentioned in other posts that I want to open something with NFCU to help diversify, not because I'm expecting any AA from Cap One, but just to not have too many eggs in one basket since they already have over 80% of my TCL before any Discover deal and nearly 90% if they buy Disco. I wonder though how long I should wait? I have 3 potential pathways

Path 1: wait till new account is 6 months old so I can recover most of the hit from the new account (would be 0/6, 1/12, 3/24)
Path 2: wait till my previous card (VX) hits 12 months. This would mitigate points to a lesser degree but at least ensure 1/6, 1/12.
Path 3: apply now before the new account reports and any hits beyond last month's HPs take place

All this being said, I do not have my DD with them (it's a real pain to change at my employer), just a small 1.3k certificate opened 3.5mo ago. I'm mainly looking at the Cash Rewards card since I don't anticipate giving themconsistent heavy usage (with my current set up I use BCP for groceries, gas, and streaming, Savor for dining/entertainment/uber, and VX for travel and my catch all). I'm not sure howmuch that would impact an approval.

Re: Approvals, rates, SLs and scores

Horseshoez — Sat, 25 May 2024 12:56:48 GMT

@Zoostation1, I am a relatively new NFCU member so I have only limited experience with them from an approval perspective. With that disclaimer in mind, my gut tells me to apply now; even if the starting limit is lower than what you were hoping for, anectodal reports say they are very liberal with CLIs.