Really Good Question!

[Anonymous]

So, after noticing that MYFICO provides a spectrum of mortgage / lending rates for various FICO scores something hit me:  Why don't they provide the LENDERS who would LEND to people with THOSE scores?  More importantly, every lender will post some minimum requirements for individuals applying for credit, so why don't these lenders / banks include their minimum credit scores within these requirements?

Sure, someone will say: Oh...because every credit score results from a different situations...blah blah.  But the reality is that, no, it doesn't.  Lenders are slaves to scores because they want to remove human intervention from the approval process.  That's a fact.  They don't want to analyze WHY you have your credit, only whether you WILL CONTINUE to have your credit, so they evoke the "past performance is a predictor of future repayment" garbage. 

[haulingthescoreup]

There is a link here to CC's --see "Get a Credit Card" above. It would be pretty spiffy if that site's fair/ good/ excellent ratings matched FICO score ratings, but it's a start.

CCC's stick pretty close to their score requirements, but these seem to change pretty frequently. Look at AmEx's roller coaster record of accepting and denying. Even then, I read every day about people getting approved for AmEx cards with scores much lower than mine (current EX = 731), but I have a 30-day less than a year old and a 90-day less than two years old. I'm still firmly on their fecal chart. Many other lenders have additional automatic disqualifiers, such as unpaid collections, charge-offs within a certain time frame, bankruptcy and so on. It's certainly not just scores.

Mortgage lenders especially do in fact look at a whole lot more than CC's --debt to income, employment history, and on and on. I've never had to supply this for cards, but we sure did for a mortgage.

If lenders posted score ranges that would qualify for their products, everyone with "qualifying" scores who was turned down would go ballistic, and the lenders would have to triple their customer service departments just to handle the phone calls and bomb threats.

[Anonymous]

I have to slightly disagree about lenders being at risk by disclosing score requirements.  The reality is that lenders WANT people to apply for their credit instruments.  Ermmm, I think my junk mail pile backs me up here So, they would receive greater return on their investment because only those who meet the requirements would apply!  By your argument, they want to decrease number of applicants so as to not overwhelm the customer service reps! 

We live in a world of numbers; if we didn't, identity theft would be a heck of a lot harder! 

[Anonymous]

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@Anonymous wrote:

They don't want to analyze WHY you have your credit, only whether you WILL CONTINUE to have your credit, so they evoke the "past performance is a predictor of future repayment" garbage.

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I think they still do want to analyze why you have your credit.

Example (although a little old):
When I purchased my home over 12 years ago, the balances on my CC were really high almost each month but they were PIF. My parents were AU on my cards and used them heavily for their rental property business. During underwriting, the bank called and said, "Um, you're spending more than you're earning." I replied, "No, my parents are spending more than I'm earning."

Gosh, I would have loved to have heard his thoughts guessing where all my extra income was coming from.

[haulingthescoreup]

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@Anonymous wrote:

I have to slightly disagree about lenders being at risk by disclosing score requirements. The reality is that lenders WANT people to apply for their credit instruments. Ermmm, I think my junk mail pile backs me up here So, they would receive greater return on their investment because only those who meet the requirements would apply! By your argument, they want to decrease number of applicants so as to not overwhelm the customer service reps!

We live in a world of numbers; if we didn't, identity theft would be a heck of a lot harder!

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I do see what you're saying, and as a consumer, I would love to see this! I can imagine a little box that says,

"Typical FICO EX scores for this card are 690 and above. However, other elements on your credit reports can and will affect our decision to offer you this card, including payment history and current balances."

(Or something similar.)

But I can promise you, consumers will see that "690 and above", stop reading right there, apply, get denied because of two collections that hit 3 months ago, and go ballistic. I predict this because I see it all the time here! "I read four different threads that people with scores 30 points lower than mine got approved for the Greater World Export Bank Super-Bling World Signature MasterVisa, and whogavemecredit-dot-com scores were 40 points lower, but they denied me!!!"

And I am absolutely not making fun of people who post this. People fixate on the numbers, and a lot of that, of course, is that we all tend to use improving scores as feedback for our efforts in improving our credit histories. As Americans, our nature is to be optimistic and to have faith in our ability to work hard and improve our situation, and it's also our nature to expect things to be straight-forward and to want quick results. So when we see our scores going up, and up some more, then by golly, it's time for creditors to realize that we've changed things around, and the proof is in the scores.

But there's so much more to approvals than that, much of which is a secret on the same level as my grandmother's biscuit recipe, which she took to the grave. I just can't imagine a CCC mid-level manager posting a suggested score range and surviving more than a few days. If nothing else, the company's CSRs would shred him/her to pieces after the first 6 dozen furious calls from denied applicants. And it would happen --I once read an angry post here where a member was turned down for a card and attacked the rest of us for misleading him or her (whichever it was.)

Message Edited by haulingthescoreup on 02-05-2008 05:50 PM

[Anonymous]

not sure if this what you mean.  but if you buy equifax direct and I think also EX and TU)  you can click on rate finder and put in your score, type of loan you are looking for and it will give you lender's name and interest plus points, etc. for your score.  Since they take average of all three  put that score in.

It will give you credit cards, mortgages and car loans for your state.

Message Edited by casinoannie97 on 02-05-2008 09:57 AM