3 Simple Ways to Minimize Likelihood of AA

[Anonymous]

Jace - MS isn't on the list, that's why I asked.

[Anonymous]

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@Berk wrote:

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@Anonymous wrote:

Feel free to add to the list or poke holes, below is entirely my opinion of course.

• Keep at least the sum of your total credit lines with a lender in a savings account with that lender. This establishes beyond your stated income that you have the means to cover your spending at all times.

• Stop opening 10 cards in a year. Normal, non-extreme-risk users might open 1 or 2 a year, if that. In addition, "don't poo where you eat", meaning, don't try to milk the lender you are most comfortable with or enjoy the products of by doing sketchy things like MS or even fringe behavior like systematically closing and reopening the same card for a bonus.

• Keep your utilization in check and don't carry massive balances, especially if you have no other banking history with that lender (see point 1).

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If you give me the money I'll gladly do number 1 on your list.

I don't carry any balances and keep my overall utilization at between 2%-5% on any given month.

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By the way, number 1 does not only help simply to avoid AA, but it can also come in handy with a private banker. At the end of the day, you are afforded more courtesies the larger the amount you have deposited and in my anecdotal experience usually treated better.

[red259]

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@Anonymous wrote:
Jace - MS isn't on the list, that's why I asked.

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Google the term for a detailed explanation of what it is. They don't allow discussions on these forums about the details of MS, but a quick internet search now that you know the term will explain what it is. 

[bz386]

#1 is likely a bad idea.

Someone correct me if I'm wrong, but I believe banks have to separate their lending from banking, thus an underwriter does not have access to your bank account to be able to see your balance.

Also, having credit and savings with the same bank may be very bad if the lender decides to take AA. Chase is known to close both the credit and bank accounts. When this happens you may end up with a closed CC and also no access to your funds, which may cause you to be unable to pay your other CCs.

[red259]

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@bz386 wrote:

#1 is likely a bad idea.

Someone correct me if I'm wrong, but I believe banks have to separate their lending from banking, thus an underwriter does not have access to your bank account to be able to see your balance.

Also, having credit and savings with the same bank may be very bad if the lender decides to take AA. Chase is known to close both the credit and bank accounts. When this happens you may end up with a closed CC and also no access to your funds, which may cause you to be unable to pay your other CCs.

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Is this true? I never heard anyone say this happened to them before. If this is indeed true then I would never keep money with Chase, because that would be insane to deal with. 

[baller4life]

Yep it's true!

[kdm31091]

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@red259 wrote:

I think I have done up to 8 apps a year or so. This point is heavily dependent on the thickness of your file. If you have a thin file you can easily wind up with AA if you all of a sudden add 10 accounts when you had none before. If you have a thick file then adding new accounts is much much less likely to trigger AA. I think going forward I will try to limit my new apps within a single year to four to six apps. This will include both business and personal apps. You most certainly do not need to limit yourself to one or two apps a year in order to avoid AA. However, it is best not to app for more than four cards in any six month period. App sprees can put lenders on alert so some pacing makes sense and also if going for signup bonuses you don't want to put yourself under a lot of pressure to make massive initial spend. 

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I can only partially agree with you here. Plenty of people with established, "thick" files have recieved AA too, so that doesn't make someone immune. Lots of new accounts are a risk factor regardless. Yes, the risk is amplied on a shorter file, but it's still not a good thing for anyone to add a bunch of accounts.

[jbsea]

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@red259 wrote:

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@bz386 wrote:

#1 is likely a bad idea.

Someone correct me if I'm wrong, but I believe banks have to separate their lending from banking, thus an underwriter does not have access to your bank account to be able to see your balance.

Also, having credit and savings with the same bank may be very bad if the lender decides to take AA. Chase is known to close both the credit and bank accounts. When this happens you may end up with a closed CC and also no access to your funds, which may cause you to be unable to pay your other CCs.

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Is this true? I never heard anyone say this happened to them before. If this is indeed true then I would never keep money with Chase, because that would be insane to deal with. 

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Well I've read many times where Navy Fed will do it.  So if they can I'm sure that everyone else can.  But there is no way i'm going to have that many open savings and checking accounts with all my creditors.  In very general terms I think that most people on this forum are the PIF type since most of us really like our rewards not overtaken by any interest that would happen if not paid in full. 

[UncleB]

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@jbsea wrote:

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@red259 wrote:

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@bz386 wrote:

#1 is likely a bad idea.

Someone correct me if I'm wrong, but I believe banks have to separate their lending from banking, thus an underwriter does not have access to your bank account to be able to see your balance.

Also, having credit and savings with the same bank may be very bad if the lender decides to take AA. Chase is known to close both the credit and bank accounts. When this happens you may end up with a closed CC and also no access to your funds, which may cause you to be unable to pay your other CCs.

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Is this true? I never heard anyone say this happened to them before. If this is indeed true then I would never keep money with Chase, because that would be insane to deal with. 

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Well I've read many times where Navy Fed will do it.  So if they can I'm sure that everyone else can.  But there is no way i'm going to have that many open savings and checking accounts with all my creditors.  In very general terms I think that most people on this forum are the PIF type since most of us really like our rewards not overtaken by any interest that would happen if not paid in full. 

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Just to clarify, the Navy Fed account 'freezes' you hear about occasionally on here aren't due to 'AA'; all accounts (including checking and savings) are frozen by NFCU security when there is an issue with the overall NFCU membership, not an issue with the actual accounts. 

This is quite different from 'AA'. 

[bz386]

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@red259 wrote:

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@bz386 wrote:

#1 is likely a bad idea.

Someone correct me if I'm wrong, but I believe banks have to separate their lending from banking, thus an underwriter does not have access to your bank account to be able to see your balance.

Also, having credit and savings with the same bank may be very bad if the lender decides to take AA. Chase is known to close both the credit and bank accounts. When this happens you may end up with a closed CC and also no access to your funds, which may cause you to be unable to pay your other CCs.

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Is this true? I never heard anyone say this happened to them before. If this is indeed true then I would never keep money with Chase, because that would be insane to deal with. 

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Plenty of threads about it over on FlyerTalk. In fact, Chase not only closes your CC and bank accounts, they also close the accounts of anyone living at the same address as you. And if you have business cards, they will close those, too. Basically when they decide they don't want to deal with you, they will shutdown any and all accounts they can find.

Personally, I tend to keep my savings in an account at my credit union and I don't have a CC with them and no interest in getting one. I did have a checking account and savings account at chase (opened just for the $250+$250 bonus), but when I read all the horror stories I decided there's no way I'm going to trust Chase with my money. They can trust me with theirs if they want to :-)