Interpreting SLs

[VanderSnoot]

I've seen a few posts talk about SLs and how waiting can help you get a better SL. One trend I noticed when reviewing my recent app spree, is that with banks I have an open account (CC or other), my SLs were $20-25k, whereas with banks I don't have an open account (although I may have a closed account), my SLs were $10-15k. Is there anything I can read into this about how banks are viewing me or their internal algorithms?

[Anonymous]

When you're "new" with a particular lender you might start off lower than you would think.  e.g. WF approved me for $7500 whereas Chase (existing) when I apped for another CC started at 25K... but, on the other hand Uber was approved at 11K and a quick call they bumped it to 25K w/o batting an eye.  Regions on the other hand w/ no relationship started at 21K on approval.

It varies by UW guidelines of course besides existing relationship or not.  There's no set rule on where a bank will start you off at if you don't want to call and haggle with them after the automated approval the computer gives you.

[VanderSnoot]

Thanks, @Obscure-Expert. Is it always a good idea to call the issuer and ask for a CLI when approved? 

[Anonymous]

Depends on how bad you want it.  Usually a same day call will mitigate the issue of additional pulls as they'll just be combined in most cases.  If it's something that's totally out of whack like a 1K approval when your next nearest is 10K then it's worthwhile to explore.  USB did that to me with a denial for INQ's, called them for a manual review and got a 1K and called them again and got them to 10K on 2 cards for 1 HP.

If you're willing to put in the small amount effort it pays dividends sometimes.

[wasCB14]

I'm generally cynical about trying to interpret SLs.

Maybe a bank keeps a SL low because they want you to be able to get a quick approval if you decide you want a second card from them.

Maybe a credit report had a lot of little balances that hurt someone's score temporarily.

For some people, income can fluctuate from one year to another.

If you're an existing customer at a bank, new CLs may push against an internal limit.

Maybe an issuer sees a lot of other new accounts and is concerned about the risk of bust-out fraud.

The macroeconomic climate can affect lender appetite for risk.

So much can potentially affect a SL, but unless you talk to someone in underwriting it can be hard to know the reasons - if they will even say.