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@CreditMagic7 wrote:
The current credit laws are unseemly biased against the common consumer.
Sure, the entire credit scoring algorithm was created to allow the issuers a reason to charge the most amount of people a higher interest rate. This is higher credit scores plummit on a single inquiry, while moderate scores are relatively unaffected.
However, once you realize how the scoring works, you can make decisions based on what is best for your credit wise.
Thanks for the replies thus far, great thread. It is completely understandble why FICO would be adverse to CCC backdating as it will impede on their scoring metrics. CCCs really do not have too much stake in FICO - most even opting to use their own internal scoring methods. From a business sense, I can't understand why non-AMEX issuers don't backdate? Perhaps they don't think it is important? Kind of hard to believe given all the market research they do. Even here, if you were to do a search on this board "Why is AMEX is good/prestigious/etc" you'll see that the overwhelming majority of responses list backdating as an important perk. Some have alluded to the grandfather theory which is interesting, but as someone else noted that would be hard to justify with the current laws in place. Very interesting indeed.
@enharu wrote:
In most cases, backdating helps people with little to no credit history the most, especially when Amex used to backdate AUs all the way back to when the original member opened his account. It's an extremely good way to help someone get started on his credit journey, but it was abused and Amex stopped that practice. At the same time, a small group of people had issues with mortgage or other loans that required a manual review as well, evident by older forum threads on this and other forums, where backdating confused the hell out of some underwriters as to how certain people whom are only 20-30 years old but had accounts opened since 15-20+ years ago as Amex backdated AU history onto their own cards. Its a minor issue mostly due to uneducated underwriters, but nevertheless a unnecessary problem.
+1
Right, the biggest benefit are those starting new. Matter of fact, the benefit was so pronounced, this AU backdating feature was sold to ready and willing buyers for thousands of dollars. A person new to credit with an instant 30 year backdated TL via an AmEx Au was instantly propelled into the mid 700s with all the appearances of a 30 year perfect payment history, at least to the computers.
In this case, instant approvals were assured, allowing one to quickly build other TLs with various issuers.
Interesting thread. Great info from everyone. I can only imagine if Chase backdated my account since I had a cc with them 9 years ago.
@wHiTeSoL wrote:
Can't quote on the iPad but I wanted to talk about the HP/SP inquires thing. I think you are missing the point of INQs, it's solely to track when a person is seeking credit. Normally a HP is pulled prior to the computer or a person approving or denying your application so a CRA has no idea if you are approved or not until the TL is reported. Not getting a HP for a denial wouldn't accurately let a creditor know how often you are seeking new credit. Who would seem more "credit hungry?" a person who applies for a card every single day for 2 years and gets denied every time or the person who just doesn't apply at all for 2 years?
That was supposed to have been fixed you still can't quote?