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CLI Approval Theory

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Taurus22
Valued Contributor

CLI Approval Theory

I've been waiting to post this until I tested this theory, and I've completed some recent CLI's so I thought I would put it out there, see what others think...

 

I noticed a common denominator during my last CLI cycle last year.....each CLI that I was able to obtain, my credit scores that those particular lenders offer under "View my FICO Score" on their own portal page......had at least 2-3 consecutive months of increase.

 

Discover offers TU FICO 8 scores....last year, the scores they showed increased monthly from 753 --> 754 --> 770. The month it showed 770 I tried for the SP CLI....received $3,000.

 

Citi offers EQ FICO 8 scores....the past 3 months this year, my scores increased from 763 --> 778 --> 786. This month I tried for SP CLI....received $2,000.

 

FNBO offers EX FICO 9 scores....the past 3 months this year, my scores increased from 746 --> 751 --> 784. This month I tried for SP CLI.....received $4,000.

 

So I am wondering if there is actually something to this?  Each card had seen some use during all of those months, but PIF.  I'm just wondering if the scores they offer on the portal page is actually factored into the algorithm's they use to determine CLI approval. Seems awfully coincidental that this was a common thread in each approval.  Or am I just reaching for something that isn't there?

 

Any thoughts?

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FinStar
Moderator Emeritus

Re: CLI Approval Theory

Sounds like a coincidence, IMO.  Lenders already track internal behavioral scoring which is a complex internal algorithm tied to your account's performance as well as other factors (external and internal). They already factor your specific scores based on the SPs tied to your account's periodic ARs which would are not necessarily correlated to the informational scores they provide to consumers.

Message 2 of 6
GatorGuy
Valued Contributor

Re: CLI Approval Theory

Whether those are the actual scores used are irrelevant. If they are ficos they it means your over all credit profile is improving so whichever scores they pull should also be improving.

 

But as mentioned by Finstar, CLIs are so much more than just your scores.

Message 3 of 6
Taurus22
Valued Contributor

Re: CLI Approval Theory

Right, I completely understand that the algorithms are more complex than just having increasing FICO scores. As you mentioned....if your scores are steadily showing increases then your overall profile is gaining traction.... But I'm thinking this could be a somewhat rough "indicator" of your chances. Obviously, the individual is going to know what standing their overall account is in and how it's been managed in the past 2-3 months, so if the scores are showing that repeated increase and that person hasn't shown any questionable behavior, it would seem likely that a CLI would be approved.

 

Then I think about someone who has taken a credit hit (maybe a new vehicle, maybe some unexpected expenses that raised their UTI%, or a combination of things) and their credit took a dip of 40 pts or so.  The following months afterward, showing a steady increase as they regain their footing......again, as you mentioned the overall profile would be moving in the right direction again, bringing their UTI% back down, and their scores back up, etc.  Would 2-3 months of consecutive increased scores trigger something in those internal algorithms that increase the odds of getting a CLI from that point? 

 

That would lead to the possibility that a "fluctuating wave" (not drastic peaks and valleys) within your credit scoring would be beneficial to the CLI algorithm. Implying...that your way back up to a peak over 2-3 months would lend to a higher probablity to getting a CLI.

 

Maybe this is why some people are denied CLI's at times.....it's not that their scores are necessarily bad, or that they've had any drastic drop, or that they have shown bad habits....maybe it's simply that their scores saw a drop in the internal algorithm the prior month(s) and they are not showing the rise back up to that peak yet.

 

Again, I'm just working through thoughts....I'm certain that there are factors I'm not accounting for. Wondering if there may be something there to consider regarding the "wave principle" ....more DP's would definitely be needed for certain....

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Taurus22
Valued Contributor

Re: CLI Approval Theory

@Aim_High  usually has valuable input with these types of things....hoping he is gonna chime in at some point

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Aim_High
Super Contributor

Re: CLI Approval Theory


@Taurus22 wrote:

@Aim_High  usually has valuable input with these types of things....hoping he is gonna chime in at some point


Thanks for the tag, @Taurus22.  I hadn't seen this.  I've been traveling and working a lot the past week or so.  I'll respond with my thoughts but also back it up with some recent stats on my own profile.

 

I agree with @FinStar and @GatorGuy that it's highly likely that it's a pure coincidence and that narrowing down the reasons for the increase are difficult.  Both starting limits and CLIs are a complex matter since there are so many factors that vary by profile and the criterion may be weighted differently by each lender.   Even if the FICO-score effect were true in one case, I would doubt it could apply to three different lenders for that reason.  

 

I would also point out a few things about your particular case.

  • You already have scores in the high good to low excellent range (746-786) which undoubtedly helps you be approved for increases, regardless of the trend of the FICO score changes.  Smiley Happy
  • The changes you point out over three months are a net increase of 17, 23, and 38 points respectively.  That a great accomplishment, but in the grand scheme of things I don't think it made a significant difference.
  • Put another way, what if the test case had a FICO of 600 or 800, and experienced the same 17-38 point increases.  Do you think he would stand a better chance of an increase?  I just don't think it translates to a universal effect.

I agree with GatorGuy that the rising score indicates a profile that is improving in some ways, and that is helpful, regardless of the reason.  But I would consider focusing on WHY your score rose 17-38 points as what could be the reason you've had CLI success instead of the score increase itself.   For example, my FICO EX Score 08 is often my lowest score and has taken a beating lately after a lot of credit-seeking hit that bureau harder.  It was 822 in 08/2020; it rose to 830 in 03/2021, 836 in June 2021, and just went all the way up to 845 in 07/2021.  Well, the likely reason for that 23-point increase is that I've been gardening since 08/2020 so I'm 11 months app and inquiry-free!  So if I were approved for a CLI today, it's likely that my gardening (and not the score change itself) was the factor that helped.

 

Likewise, a low score may hold someone back from a CLI.  But is it the low score itself?  Or is it the reason for the low score, such as late payments or other derogatories?  Those need to age (and the score to rise) before they become less of a concern for a lender to give higher limits.

 

Navy FCU turned me down for a More Rewards card last summer with a perfect 850 TU 08 score and a high NFCU internal score ... because I had a lot of new accounts.  Higher FICO scores only get you so far.  Taking that a step farther, if someone's recent new applications are a cause for denying a new card, you can bet that a CLI might also be questioned, regardless of FICO.

 

I've gotten some SP CLIs with GS Bank/Apple, Navy FCU. and Citi while I've been gardening.  I attribute the Apple CLI to the spending patterns I've correlated on some threads between our community member reports and don't believe FICO had much influence, as long as it was relatively stable.  Navy FCU has given me their full $4K CLI on my last two CLIs.  While they've had me locked into an 850 score for over a year on my TU 08, I get the same increases as many of our members with much lower and possibly less stable scores.  Navy doesn't even seem to require much if any usage to give an increase.  Even with my high scores and gardening, Citi just gave me $1.5K on each recent CLI, which is less than the $3K they gave me for several before that. And it was less than the $2K you received.  (My Citi Bankcard score 08 has been increasing like my EX 08 in the past year and is up to 874/900, but they didn't give me a larger increase with that change.  Of note, however, is that my spending is down on that card in the past two years since I've opened better cards and that may be more the reason for slower CLIs.)

 

Usage often matters.  There are a few lenders (including Capital One and Goldman Sachs) who only respond well to heavier usage of their cards to get an increase, but I don't believe that applies any of those three lenders you mentioned.  There are some (like Navy FCU) who will give a CLI even if you've had few if any swipes of the card.  In general, I believe most are in the middle and would like to see at least some usage and repayment history to give CLIs.   Lenders just want to see you're continuing to show interest in their cards, and able to manage the credit limit over time with responsibility. 

 

Income and Debt-to-Income probably matters much more than minor changes to FICO.  There's a reason most lenders ask you to reverify income and housing information when you apply for CLI.  They want to know you'll be easily able to repay any credit limit they approve.  That info combined with debts reported on your credit file can give them a better picture of exactly where you are with those parameters.  That's the same reason why having 850 FICO scores across the board won't give you super-high credit limits.  You're more likely to get a $50K SL with a 770 FICO score and $700K income than with an 850 FICO and $60K income. 


Business Cards


Length of Credit > 40 years; Total Credit Limits >$898K
Top Lender TCL - Chase 156.4 - BofA 99.7 - AMEX 95.0 - CITI 94.5 - NFCU 80.0
AoOA > 30 years (Jun 1993); AoYA (Feb 2024)
* Hover cursor over cards to see name & CL, or press & hold on mobile app.
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