topic Re: What’s better? in SmorgasBoard

What’s better?

SRT4kid93 — Sun, 22 Sep 2024 16:28:08 GMT

If someone were to apply for a credit card, What would a lender prefer to see ?

1) unscoreable/no history

2) poor credit score, let's say in the 550-600 range

Re: What’s better?

Gunnerboy — Sun, 22 Sep 2024 16:33:38 GMT

No history is better than poor history.

Re: What’s better?

FicoMike0 — Sun, 22 Sep 2024 17:00:13 GMT

Depending on the lender, I agree, no history. Better to be unknown than a known bad risk. Predatory lenders, who you should avoid, might specialize in low score clients they can mine for fees.

Re: What’s better?

FireMedic1 — Thu, 26 Sep 2024 07:37:35 GMT

@SRT4kid93 wrote:
If someone were to apply for a credit card, What would a lender prefer to see ?

1) unscoreable/no history
2) poor credit score, let's say in the 550-600 range

Least theres a score rather than un-score.

Re: What’s better?

SouthJamaica — Thu, 26 Sep 2024 14:17:40 GMT

Both are negative.

As to which is more negative, that can vary with the lender, the product, the algorithm, etc.

Re: What’s better?

SRT4kid93 — Thu, 26 Sep 2024 15:32:43 GMT

So far that's 2 votes for un score able

1 vote for poorish score

1 vote for it depends.

interesting results

Re: What’s better?

NoHardLimits — Thu, 26 Sep 2024 20:19:29 GMT

@SouthJamaica wrote:
Both are negative.

As to which is more negative, that can vary with the lender, the product, the algorithm, etc.

It's important to match the profile to the card product. With no history, concentrate on "starter" cards. These can include products marketed to students as well others new to credit (e.g. Freedom Rise). With poor credit scores, concentrate on "rebuilder" cards but try to avoid the predatory lenders. Secured cards would be good for either type of profile.

Re: What’s better?

Thomas_Thumb — Fri, 27 Sep 2024 16:20:56 GMT

@SRT4kid93 wrote:
If someone were to apply for a credit card, What would a lender prefer to see ?

1) unscoreable/no history
2) poor credit score, let's say in the 550-600 range

Generally unknown behavior is lower risk than bad behavior. Would it be less risky to have a disagreement with a homicidal maniac or a total stranger?

ChexSystems has 45% of profiles in their system unscored due to lack of data. They receive 9999 as a default. It is far more likely the unknowns will qualify for new credit than profiles with bad Chex scores.

On the flip side, gangs may seek out individuals with certain types of criminal records. Similarly, preditory lenders may target people with a specific type of poor credit profile.

Re: What’s better?

SRT4kid93 — Fri, 27 Sep 2024 16:29:26 GMT

@Thomas_Thumb @NoHardLimits @SouthJamaica @FireMedic1

ok so let me ask you all this.

in your opinion at what point would the bad score start to look better than no score?

for clarification) in my original question the applicant with bad credit was in 550-600 range.

so what if we changed that to 600-650 range. Now the applicant with bad credit doesn't look so bad right?

so at what score would the bad credit applicant start to look better than the no credit applicant?

600?625?650?

Re: What’s better?

NoHardLimits — Fri, 27 Sep 2024 18:07:15 GMT

@SRT4kid93 wrote:
@Thomas_Thumb @NoHardLimits @SouthJamaica @FireMedic1

ok so let me ask you all this.

in your opinion at what point would the bad score start to look better than no score?

for clarification) in my original question the applicant with bad credit was in 550-600 range.

so what if we changed that to 600-650 range. Now the applicant with bad credit doesn't look so bad right?

so at what score would the bad credit applicant start to look better than the no credit applicant?

600?625?650?

There is no simple across the board rule. It all depends on the lender and the specific card product. Just try your best to match the profile with a suitable product.

Re: What’s better?

FireMedic1 — Fri, 27 Sep 2024 18:31:30 GMT

If you have no score. They have nothing to go by. Its about risk. Lower score could be brand new to credit or baddies from the past. Once I hit 700 after BK over 9 yrs ago. Doors opened.

Re: What’s better?

Anonymous — Sat, 28 Sep 2024 16:30:13 GMT

Someone who:
Has never had a loan
Has a total of 1 credit card that is older than 6 months old but less than one year.
Has a total of 1 HP
Has no AAs
Has 1% Uti

FICO Score estimator predicts score estimated to be between:
710 - 760

This fits data points of a few people IRL I know that had fit this model.

No score is preferable to poor score since in a matter of months after finding an issuer to let you in the door you will have a dandy score to hinge off of.

---------------

As a guess as to what score is better than no score since I love arbitrary guessing and assumption?

842

Re: What’s better?

SRT4kid93 — Sat, 28 Sep 2024 18:40:12 GMT

@Anonymous

John brings up a good point, it is actually shocking how quickly someone can develope really good score for themselves.

my equifax profile is my young one and about 4 months ago these were my data points on that card

- no loans on that profile (open or closed)

- only 1 card on that profile (open or closed)

- had that 1 card for 9/10 months

- after that short amount of time I already had a 768 FICO score.

Of course, the rest of the profile mattes too. And if a lender sees that profile, they will see that's still very young and has very little established payment history. So while the score is good, the overall profile does not demonstrate the ability to pay bills for multiple lenders for a long period of time.

meaning the profile is still very week in the eyes of any lender. But if we are talking about score only, you can get a good score very quickly

Re: What’s better?

Anonymous — Sun, 29 Sep 2024 04:27:48 GMT

@SRT4kid93 wrote:
Of course, the rest of the profile mattes too. And if a lender sees that profile, they will see that's still very young and has very little established payment history. So while the score is good, the overall profile does not demonstrate the ability to pay bills for multiple lenders for a long period of time.

meaning the profile is still very week in the eyes of any lender. But if we are talking about score only, you can get a good score very quickly

I am not actually sure what any of this is about besides not having anything to ask. I see no practical use of this comparison. There is no correlation.

"But if we are talking about score only, you can get a good score very quickly"

You start out of the box with a good score. You maintain and improve that score over time simply by always doing what you agree to do. No tricks. No gimmicks. "Do" and you don't have score taken away from you for extended periods of time.

"So while the score is good (for a new profile), the overall profile does not demonstrate the ability to pay bills for multiple lenders for a long period of time. "

Yes, and if you compare that new 710-760 to someone with a 580 score you are comparing:

someone with a good score and no history of doing bad

with

someone with a bad score and a history of doing bad