Chase cancelling all accounts of recent card applicants whom they deem risky

[red259]

I wouldn't be so quick to brush off these concerns with chase. On my two recent apps with them they have been more stingy with credit even though i had closed out other chase cards. Ive been dealing with them since 2013 and my credit profile at the moment is way stronger than it has ever been. Something has definitely changed with chase and to deny it is to ignore the evidence in front of us. Doesn't mean to panic but i will certainly be more conservative than in the past.

[Revelate]

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@Anonymous wrote:

Hi Dinosaur.  Thanks for that kind word, bud!  Glad this is proving to be of interest to you all, and happy to learning from everybody's take on it.

I certainly agree with the other folks that there's no cause for panic.  It strikes me that DoC is just trying to be an honest journalist (in this geeky audience he serves) by getting a story out after having seen several confirmations of it.  Naturally we'll know more about how seriously to consider it as the next few weeks unfold.

I also agree with the other folks that news reports like this are helpful reality checks about impulsive and ultimately irrational behavior that can be reinforced by living in an echo chamber of like minded hobbyists.  Behavior like applying for card after card after card, assuming that "app sprees" are naturally good and helpful compared to spreading your CC applications out, constantly angling for CLI after CLI after CLI (again assuming by default that in so doing there could be no risk to how CC issuers perceive you), and so on.

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I'd love to see someone try to argue against that assumption from a FICO scoring perspective.

While I do see people not waiting a reasonable amount of time between sprees, or applying for absolutely frivilous tradelines, and of course if you have a big ticket item coming up any other application is suspect; however, if we just take scoring alone in a vacuum, sprees > spreading out based on napkin math and algorithm implementation.

[longtimelurker]

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@Revelate wrote:

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@Anonymous wrote:

Hi Dinosaur.  Thanks for that kind word, bud!  Glad this is proving to be of interest to you all, and happy to learning from everybody's take on it.

I certainly agree with the other folks that there's no cause for panic.  It strikes me that DoC is just trying to be an honest journalist (in this geeky audience he serves) by getting a story out after having seen several confirmations of it.  Naturally we'll know more about how seriously to consider it as the next few weeks unfold.

I also agree with the other folks that news reports like this are helpful reality checks about impulsive and ultimately irrational behavior that can be reinforced by living in an echo chamber of like minded hobbyists.  Behavior like applying for card after card after card, assuming that "app sprees" are naturally good and helpful compared to spreading your CC applications out, constantly angling for CLI after CLI after CLI (again assuming by default that in so doing there could be no risk to how CC issuers perceive you), and so on.

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I'd love to see someone try to argue against that assumption from a FICO scoring perspective.

While I do see people not waiting a reasonable amount of time between sprees, or applying for absolutely frivilous tradelines, and of course if you have a big ticket item coming up any other application is suspect; however, if we just take scoring alone in a vacuum, sprees > spreading out based on napkin math and algorithm implementation.

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Guess I have to bite then!  Can you explain why sprees do better scorewise?

[sarge12]

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@Anonymous wrote:

Hi Dinosaur.  Thanks for that kind word, bud!  Glad this is proving to be of interest to you all, and happy to learning from everybody's take on it.

I certainly agree with the other folks that there's no cause for panic.  It strikes me that DoC is just trying to be an honest journalist (in this geeky audience he serves) by getting a story out after having seen several confirmations of it.  Naturally we'll know more about how seriously to consider it as the next few weeks unfold.

I also agree with the other folks that news reports like this are helpful reality checks about impulsive and ultimately irrational behavior that can be reinforced by living in an echo chamber of like minded hobbyists.  Behavior like applying for card after card after card, assuming that "app sprees" are naturally good and helpful compared to spreading your CC applications out, constantly angling for CLI after CLI after CLI (again assuming by default that in so doing there could be no risk to how CC issuers perceive you), and so on.

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CGID...I think many on these boards are actually aware that we push the limits on apps and such, and I for one would not blame the credit card issuer for AA taken on my cards. I do know that a lot of my cards I only applied for to get the $100-250 startup bonuses, and most have no real chance of recouping these bonuses by me actually using them regularly, and since I always PIF they make no interest off of me. The issuers offer these bonuses because they will more than make up for it on most customers in time. Many including myself on these boards are simply not the normal credit card user, and look to make a profit from the issuers and actually do. I would even imagine the issuers read these boards and know there are bonus chasers. The tricky part is to get as much as possible without calling attention to ourselves enough to prompt any AA. I for 1 have limited the real problems any AA would actually cause me to a minimum, but seeing trends by issuers is part of this game. The issuers set the rules of this credit card game up for their own benefit, I just use their rules for my own benefit without crossing any ethical lines through processes we can not discuss here. I have been expecting the issuers to become more strict as more credit card users become SUB chasing transactors, but so far the number of credit card revolvers remains high enough to be worth the gamble to the banks. After all there is still the majority that actually pays their outrageously high 20%+ interest rates. I will not be one though in spite of the extra risk of AA.

[Revelate]

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@longtimelurker wrote:

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@Revelate wrote:

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@Anonymous wrote:

Hi Dinosaur.  Thanks for that kind word, bud!  Glad this is proving to be of interest to you all, and happy to learning from everybody's take on it.

I certainly agree with the other folks that there's no cause for panic.  It strikes me that DoC is just trying to be an honest journalist (in this geeky audience he serves) by getting a story out after having seen several confirmations of it.  Naturally we'll know more about how seriously to consider it as the next few weeks unfold.

I also agree with the other folks that news reports like this are helpful reality checks about impulsive and ultimately irrational behavior that can be reinforced by living in an echo chamber of like minded hobbyists.  Behavior like applying for card after card after card, assuming that "app sprees" are naturally good and helpful compared to spreading your CC applications out, constantly angling for CLI after CLI after CLI (again assuming by default that in so doing there could be no risk to how CC issuers perceive you), and so on.

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I'd love to see someone try to argue against that assumption from a FICO scoring perspective.

While I do see people not waiting a reasonable amount of time between sprees, or applying for absolutely frivilous tradelines, and of course if you have a big ticket item coming up any other application is suspect; however, if we just take scoring alone in a vacuum, sprees > spreading out based on napkin math and algorithm implementation.

---

Guess I have to bite then!  Can you explain why sprees do better scorewise?

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An inquiry and a new account (sometimes) are negatives: any time you have any negative in the algorithm, you want that negative to be as old as possible; since we're talking maximum FICO scoring for future use, that implies if you want a new credit card (or some other tradeline) apply for it right now.  

This of course is excepting the time when you are thinking about a mortgage within the next year, and possibly auto loan as well where taking apps well, everyone consider yourselves warned as inquiries at least on the mortgage models, count for the entire year no fade.  While I saw this explicitly in my own mortgage tracking data (in the installment utilization thread if anyone's really curious) I got a confirmation datapoint just recently... this was on TU Classic 04 which is the Transunion score for a trimerge mortage pull with 1 scorable inquiry 364 days previously:

4. You've recently been looking for credit.

And that reason code was gone 2 days later with 0 inquiries within the last year.

So the old school spreading applications out was once every six months, just napkin math on 3 cards though it works just as well with 5 or more if you really want to spree that hard... and also handwaving the fact the inquiries may land on different bureaus and read Inquiries as "Scoreable inquiries within the last year."  Also with how AAOA is calculated, this can be extended to the more general use case than this simplistic example.

In 12 months and beyond post spree you are better on every metric, and I'd suggest it's better at 6 months too.

Spree	0 months	6 months	12 months	18 months
Inquiries	3	3	0	0
Tradelines	3	3	3	3
AAOA	0 months	6 months	12 months	18 months
Spread	0 months	6 months	12 months	18 months
Inquiries	1	2	2	1
Tradelines	1	2	3	3
AAOA	0 months	3 months	6 months	12 months

[longtimelurker]

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@Revelate wrote:

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@longtimelurker wrote:

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@Revelate wrote:

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@Anonymous wrote:

Hi Dinosaur.  Thanks for that kind word, bud!  Glad this is proving to be of interest to you all, and happy to learning from everybody's take on it.

I certainly agree with the other folks that there's no cause for panic.  It strikes me that DoC is just trying to be an honest journalist (in this geeky audience he serves) by getting a story out after having seen several confirmations of it.  Naturally we'll know more about how seriously to consider it as the next few weeks unfold.

I also agree with the other folks that news reports like this are helpful reality checks about impulsive and ultimately irrational behavior that can be reinforced by living in an echo chamber of like minded hobbyists.  Behavior like applying for card after card after card, assuming that "app sprees" are naturally good and helpful compared to spreading your CC applications out, constantly angling for CLI after CLI after CLI (again assuming by default that in so doing there could be no risk to how CC issuers perceive you), and so on.

---

I'd love to see someone try to argue against that assumption from a FICO scoring perspective.

While I do see people not waiting a reasonable amount of time between sprees, or applying for absolutely frivilous tradelines, and of course if you have a big ticket item coming up any other application is suspect; however, if we just take scoring alone in a vacuum, sprees > spreading out based on napkin math and algorithm implementation.

---

Guess I have to bite then!  Can you explain why sprees do better scorewise?

---

An inquiry and a new account (sometimes) are negatives: any time you have any negative in the algorithm, you want that negative to be as old as possible; since we're talking maximum FICO scoring for future use, that implies if you want a new credit card (or some other tradeline) apply for it right now.  

This of course is excepting the time when you are thinking about a mortgage within the next year, and possibly auto loan as well where taking apps well, everyone consider yourselves warned as inquiries at least on the mortgage models, count for the entire year no fade.

So the old school spreading applications out was once every six months, just napkin math on 3 cards though it works just as well with 5 or more if you really want to spree that hard... and also handwaving the fact the inquiries may land on different bureaus and read Inquiries as "Scoreable inquiries within the last year."  Also with how AAOA is calculated, this can be extended to the more general use case than this simplistic example.

In 12 months post spree you are better on every metric.

Spree	0 months	6 months	12 months	18 months
Inquiries	3	3	0	0
Tradelines	3	3	3	3
AAOA	0 months	6 months	12 months	18 months
Spread	0 months	6 months	12 months	18 months
Inquiries	1	2	2	1
Tradelines	1	2	3	3
AAOA	0 months	3 months	6 months	12 months

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RIght, but that is skimming over the bit that concerned me: the impact in the first 6 (or 12) months, where all but AAoA is worse.    And I think this may (sort of) matter as many people who spree are not "spree once and garden forever" but will be doing sprees every year (say) and so will have substantial periods of time where they have a lot of hits.   

And I think it depends on the size of the spree and lots of other factors as to whether X hits all at once ends up doing more damage than X hits spread out.

[Revelate]

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@longtimelurker wrote:

RIght, but that is skimming over the bit that concerned me: the impact in the first 6 (or 12) months, where all but AAoA is worse.    And I think this may (sort of) matter as many people who spree are not "spree once and garden forever" but will be doing sprees every year (say) and so will have substantial periods of time where they have a lot of hits.   

And I think it depends on the size of the spree and lots of other factors as to whether X hits all at once ends up doing more damage than X hits spread out.

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To be fair I've already suggested that people not waiting enough time between sprees is a mistake, and it really isn't much handwaving.

So extend it to 5 accounts and my own pattern of apps, basically once every 13 months for sprees historically but we'll just call it a flat 12 months... and assume they all land on Experian which for me is basically the case unless I purposely seek out a TU or EQ puller.  Worst possible scenario

And to make it even more unfair, we'll keep the 1 account per 6 months.   Sure, when talking 5/24 YMMV, but just FICO scoring, other than inquiries which are WTFever the spree-er is never less in AAOA, and winds up with double the tradelines (if you find that of value, AAOA buffering, bonus chasing, w/e).

Spree	0 months	6 months	12 months	18 months	24 months
Inquiries	5	5	5	5	0
Tradelines	5	5	10	10	10
AAOA	0	6 months	6 months	12 months	18 months
Spread	0 months	6 months	12 months	18 months	24 months
Inquiries	1	2	2	2	2
Tradelines	1	2	3	4	5
AAOA	0	3 months	6 months	9 months	12 months

[Anonymous]

Hold the phone. Chase cancelling newly issued cards soon after sending them out is, in my opinion, symptomatic of a company that doesn't have all their ducks in a row. These checks should be done before we are notified of approval and receive our cards. Chase is a disjointed company, again, in my opinion.

[sarge12]

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@Anonymous wrote:

Hold the phone. Chase cancelling newly issued cards soon after sending them out is, in my opinion, symptomatic of a company that doesn't have all their ducks in a row. These checks should be done before we are notified of approval and receive our cards. Chase is a disjointed company, again, in my opinion.

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To be fair, the DoC article cited 5 cases of this, and almost all or maybe even all of them were reversed. Some in this thread have stated that they do not see a huge increase in AA from chase...I don't know, but 5 cases is just not enough to declare it is symptomatic of a company not having their ducks in a row. I have come to realise that 5 cases of this repeated on various forms of social media 1000 times does not make it equal 5000 cases of chase cancelling cards. Of greater concern IMO, is the recent news reports of a much larger than expected number of defaults on credit card debt reported this year. I would expect issuers to tighten their standards based on that.

[sjt]

I would love to see more data points of the people that were shut down. It would be interesting to know if those folks had a thin file, what their overall utilization % was, and what their Chase balance was at the time of the shut down.