What's in your Wallet does it really matter?

[Anonymous]

The "types" of and the "brand and flavor" of credit cards you currently have food for thought... Do these have any effect on applying for future credit cards you may be interested in? What are the odds of approval?

Okay, we all know that if you've been with a certain FI (it doesn't matter who it is) and have built a positive relationship with them, though this is never a guarantee, chances are if you apply for another flavor of their card under that same domain, the most likely outcome is that you'll be approved for that card (the obvious is that you've kept up a good payment history of course and overall credit profile).

Now let's say all Noah owned is an Indigo CC with a max of $300 CL, a BofA secured Visa CC and a Synchrony health credit card with a max of $1K. Uses all his cards regularly and makes all payments due on time for a few years now. As time goes by, his CR continues to rise to the tune of high 6 to low 700 levels.

If he applies for another CC let's say CSR, AMEX, or something more mainstream (for folks who are dubbed to have good to excellent credit cat) as we know it. CapOne chimes in I don't know you but will take a stab with the Plat, Discover says I don't know you but I love you with most def. take you on!)

Will FI's make an overall "judgement" call based on the cards he currently possess? (oh this bloke is rebuilding, this bloke just got his fast-food job new to credit, this bloke not enough credit mix or history, this bloke for sure not in the elite card holder's list, this bloke is pulling my leg...) Or is everything decided/done blind based solely on his most current CR scores and creditworthiness on paper?

[wasCB14]

If Noah applied for a CSR, I think Chase could use "lack of experience with larger CLs" as a denial reason.

[Jnbmom]

I would tend to think that your FICO score determines your approval in regards to instant approval, however if it is a manual review they tend to really look over your reports and maybe jusy maybe but probably not very often I tend to think subprime cards may sway their decision?

[Brian_Earl_Spilner]

No, they don't care. They'll base approvals on history and existing limits.

[wasCB14]

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@Jnbmom wrote:

I would tend to think that your FICO score determines your approval in regards to instant approval, however if it is a manual review they tend to really look over your reports and maybe jusy maybe but probably not very often I tend to think subprime cards may sway their decision?

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If high FICO scores were sufficient to get instant approvals, and issuers looked no further at a report's details, then Chase's 5/24 rule would not be a thing.

It will very often be a computer reviewing the details of a report, but the issuer will still consider the details in an approval algorithm.

[zerofire]

Does that which is in your wallet really matter?  In a way yes, but generally not the way you think.

If you look at the FICO score it is actually the simplification of all or most of those scenarios down to a single number. Now banks are not brain dead so they also have computers that know how to read the report and what reasons other than the score to route it somewhere else. Obviously if you have a collection or BK with a bank and you lost them or can seriously lose them money they do not want you to be getting one of their loans. Also existing credit lines generally do one of two things, they grow or are used as a reference by other banks as things to beat to be competitive.  Nobody wants a $200 SL when everything else is in the $20,000's. Some banks are more adventurous and others are more cautious. Every so often you will find an aggressive bank that really wants to take the lead. In fact Chase did that to me recently as I finally entered their core(non co-branded) product for the first time.

Good handling and what you can safely use will show on your report and the generated score. Those two can be used to determine if you are: sub-prime, pre-prime, prime and better. Now how do you split prime and better into the ratings of prime and top prime?  The difference is actually very simple since all you have to do is add an annual fee. Only customers that can pay to play will be top prime. Those cards like the CSR, Aviator, Altitude, AmEx Platinum, etc that have AF's are all in their own league from the no AF cards. Now in some cases there is a slight overlap in rewards but still that is only near the edges and the APR is different still.

Can the new lender guess what the new customer's status is in life? Possibly. Do they care? Nope. They care about what they want which is to loan you money and make sure you pay it back as agreed. That is with interest and fees if necessary. They would prefer it if they could eliminate the rewards programs while spending stays the same but that will not happen since those rewards actually drive people to overspend. They would be happy to charge 300% interest but due to law and common sense they go with the more realistic numbers on your statements.

[arkane]

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@Anonymous wrote:

Now let's say all Noah owned is an Indigo CC with a max of $300 CL, a BofA secured Visa CC and a Synchrony health credit card with a max of $1K. Uses all his cards regularly and makes all payments due on time for a few years now. As time goes by, his CR continues to rise to the tune of high 6 to low 700 levels.

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Just a quick comment here. Assuming no baddies on Noah's file, after a few years his credit score should be 780+, possibly even breaking 800 depending on circumstances. If it's staying at high 600 to low 700 levels, that's a strong indicator of negative information being present, and that would be a much bigger impact on credit granting decisions than anything else.

[wasCB14]

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@zerofire wrote:

Does that which is in your wallet really matter?  In a way yes, but generally not the way you think.

If you look at the FICO score it is actually the simplification of all or most of those scenarios down to a single number. Now banks are not brain dead so they also have computers that know how to read the report and what reasons other than the score to route it somewhere else. Obviously if you have a collection or BK with a bank and you lost them or can seriously lose them money they do not want you to be getting one of their loans. Also existing credit lines generally do one of two things, they grow or are used as a reference by other banks as things to beat to be competitive.  Or, in a few cases, they can indicate that an applicant might be undesirable for one reason or another (bonus chaser, bust out risk, etc.). Nobody wants a $200 SL when everything else is in the $20,000's. Some banks are more adventurous and others are more cautious. Every so often you will find an aggressive bank that really wants to take the lead. In fact Chase did that to me recently as I finally entered their core(non co-branded) product for the first time.

Good handling and what you can safely use will show on your report and the generated score. Those two can be used to determine if you are: sub-prime, pre-prime, prime and better. Now how do you split prime and better into the ratings of prime and top prime?  The difference is actually very simple since all you have to do is add an annual fee. Not really. Once you get past the fee-heavy sub-prime cards, the presence of an AF usually says more about a card's perks or rewards. The term "prime" doesn't really mean much these days because a lot of customers have accepted high APRs in exchange for great rewards programs. "Prime" used to mean a customer could get a (usually no-frills) card with an APR at the Prime Rate. Only customers that can pay to play will be top prime. Those cards like the CSR, Aviator, Altitude, AmEx Platinum, etc that have AF's are all in their own league from the no AF cards. Somewhat true for CSR, but the credit standards for Amex Platinum are quite relaxed. Other banks like Simmons or Iberia have stricter credit standards on some no-AF cards. They just don't offer particularly appealing products (low APRs, but not among the lowest). Now in some cases there is a slight overlap in rewards but still that is only near the edges and the APR is different still.

Can the new lender guess what the new customer's status is in life? Possibly. Do they care? Nope. They often ask about whether you own or rent, mortgage/rent payment, income, years with an employer, other assets, etc. That can reveal a lot about someone's "status in life"...not entirely sure what they would need to guess. But yes, it is ultimately about repayment. They care about what they want which is to loan you money and make sure you pay it back as agreed. That is with interest and fees if necessary. They would prefer it if they could eliminate the rewards programs while spending stays the same but that will not happen since those rewards actually drive people to overspend. They would be happy to charge 300% interest but due to law and common sense they go with the more realistic numbers on your statements.

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[Anonymous]

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@arkane wrote:

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@Anonymous wrote:

Now let's say all Noah owned is an Indigo CC with a max of $300 CL, a BofA secured Visa CC and a Synchrony health credit card with a max of $1K. Uses all his cards regularly and makes all payments due on time for a few years now. As time goes by, his CR continues to rise to the tune of high 6 to low 700 levels.

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Just a quick comment here. Assuming no baddies on Noah's file, after a few years his credit score should be 780+, possibly even breaking 800 depending on circumstances. If it's staying at high 600 to low 700 levels, that's a strong indicator of negative information being present, and that would be a much bigger impact on credit granting decisions than anything else.

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Yep assuming no baddies, fair winds and following seas and those numbers in the hypo fairly conservative at best what are the possibilities?...

[Anonymous]

"In fact Chase did that to me recently as I finally entered their core(non co-branded) product for the first time." Holy Cow one of these?