What's the most important factor...

[Sitori]

I was wondering if anyone knew what credit card companies considered the most important thing when approving or denying credit, and deciding on what credit limit to give.

Obviously FICO is important, but does anything else ever overpower it?  I know everything ties in together to give the score, but I wasn't sure if each individual factor was looked at and considered separately.

Ex: Is AAoA looked at more importantly than payment history? Are the amount of inquiries more important than Utilization? Is Utilization more important than number of new accounts?

Basically how would you list things in order of importance?  (FICO, AAoA, payment history, Inquiries, UTL, number of accounts, income, clean credit report, etc. etc.)

What do the credit companies really LOOK at and use for consideration, and what do they overlook as not as important in the deciding factor?

[NonSufficientFunds]

The most important consideration is whether the creditor is going to get their money back. 

Here is a chart that shows how various factors affect your credit worthiness:

http://www.curtislibrary.com/wp-content/uploads/2012/05/credit-score-factors-chart.jpg

Each creditor will balance their own risk criteria with revenue objectives.

[Anonymous]

Some companies are inquiry sensitive, others are open balance sensitive, ect. And some won't touch you if you don't have a credit limit over $5,000. It all depends on the company/bank.

[Revelate]

Oi vey, underwriting shell game, I'll play!  Just regards to credit cards in the current market:

- FICO: You don't even make it to underwriting if you don't pass the filter

- Payment history: derogs can be death sentences

- Income: heals all wounds cept major derogs

- Current debt: pyramiding is scary!

- Existing tradelines: number and quality 

- Length of recent history: Too many folks ran into issues and dropped off the map, it's evidently not a big factor except for newly established credit users

- Length of complete history: Given fluxutations in the market I don't think it's that relevant.

Approvals are not individual factors, denials can be.  Also many of these categories are tied together, payment history accounts for length as well in some respects as an example.

[Sitori]

Ok so it all depends.

@revelate..you say income is #3 on the list....

If someone makes 35k a year but has a, lets say, 720 FICO and a perfect payment history with no derogs...would the limited income override the rest and result in a smaller CL or possible denial with certain companies?  Would it all depend on the credit card company?

This is excellent info =)

[NonSufficientFunds]

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@Sitori wrote:

@Revelate..you say income is #3 on the list....

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I would question what is meant by "income".  There are some people who have a great deal of money, yet do not technically have "income".

The creditor in such a case, would be more likely to base their lending decision on the available assets - although such a wealthy applicant would probably not be applying for credit in the first place, and would preferably be issued a "charge card".

[zerobacan]

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@Revelate wrote:

Oi vey, underwriting shell game, I'll play!  Just regards to credit cards in the current market:

- FICO: You don't even make it to underwriting if you don't pass the filter

- Payment history: derogs can be death sentences

- Income: heals all wounds cept major derogs

- Current debt: pyramiding is scary!

- Existing tradelines: number and quality 

- Length of recent history: Too many folks ran into issues and dropped off the map, it's evidently not a big factor except for newly established credit users

- Length of complete history: Given fluxutations in the market I don't think it's that relevant.

Approvals are not individual factors, denials can be.  Also many of these categories are tied together, payment history accounts for length as well in some respects as an example.

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Can you explain pyramiding to me?

[madmann26]

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@Sitori wrote:

Ok so it all depends.

@Revelate..you say income is #3 on the list....

If someone makes 35k a year but has a, lets say, 720 FICO and a perfect payment history with no derogs...would the limited income override the rest and result in a smaller CL or possible denial with certain companies?  Would it all depend on the credit card company?

This is excellent info =)

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Your income is seen by the lender as your ability to pay back what you owe should you max out your card(s).

If you're a millionaire but don't have a job you would have to submit financials to the lender for them to extend you credit but if you are a millionaire, you necessarily wouldn't need credit.

[Anonymous]

If you take 2 different cases and compare them:

Person A:

35,000/year, very responsible, low utilization, high fico scores...

vs.

Person B:

95,000/year, crapping out on their credit, high utilization, low fico scores....

Which person would YOU lend money to?  I would totally choose person A, because person B shows me that they could be potentially risky, lose their high paying job on a whim, etc...while person A shows me that they know how to manage their money.

[Sitori]

ah yes. Very true.