@Loquat wrote:
The age old, great debate. Want to reduce your risk of an FR so you don't have to have your dependents information shared and all the other blah, that comes with this specific subject. STOP asking for credit lines you don't need just to have them. Do you ever hear of anyone with $1k limits getting and FR? Not saying it hasn't happened but I can't think of any thread in my time here that mentioned anything of sorts.
If the company issues you an initial high line, reduce it to what you ACTUALLY need. Will it prevent an FR? Maybe, maybe not...but it can't hurt. Don't do obvious things that draws attention to yourself, (i.e. spending way outside of your normal range, maxing out a new card, manufactured spending, etc). If you need to change your spending pattern temporary at least give them a call or a heads up.
Often I read that folks say that will only provide a 4506T for a mortgage loan. I've read on this here forum of folks who have more in unsecured credit from ONE lender than I spent on my first house. While some may have very well spent more than $100k for their first home...I didn't. My point is, if you're willing to provide a 4506T to a lender for mortgage reasons, whats the huge deal when a lender gives you unsecured credit that sometimes exceeds that of a mortgage of middle class America?
I also think the lenders have to own some of this nonsense themselves. Request income prior to approval. There are a few lenders that we're all aware of that will request POI regardless of what your stated income or credit score is. Put everything in to manual underwriting. Is it time consuming, sure. Requires more manpower, absolutely. Cost more, you bet!
A little leg work from them up front *could* potentially eliminate some of their risk later. And while they're at it, stop the silliness of this 3x CLI. If a person truly needs and increase and you want to stick with the 3x deal...then consider 3x of actual spend annually with a NO CLI clause in the first year. Will it upset some...sure, mostly myFico forum folks...but probably a little less in the general public.
As consumers...we have to accept some of the blame to. We often use these lenders to pad our utilization...essentially tricking an algorithm into thinking we're spending less than we actually are via the increased lines of unused credit. It's not the lenders job to maintain your utilization in the lower percentile nor for them to help increase your score by hiding the debt your actually carrying.
You hear AZEO around here so much but in the same threads you hear, CLI, 3x...don't need it but helps for padding, blah, blah. On the flip side you hear, I've only got 3% reporting...but their signature shows $580k in available credit. Well 3% of $580k is still $17.4k in debt...which is A LOT.
There's enough blame to go around in regards to this whole FR debate and neither party has clean hands. Just my 2¢.
Hear, hear!!
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