I was reading some posts and got to thinking, When we apply for credit is the Fico score the only thing or predominantly the only thing they look at? I would assume there other factors such as inquiries and charge offs that they would take a hard look at but if my scores were all in the excellent range would it be enough?
Thanks for the replies, I guess my question came from applying for CC's and the process online since it only usually takes a few seconds I assumed they pulled the report and see 800 score and that's enough to extend the credit. I know there are other factors but as I said I assumed the score was the main one they look at.
@Rogue46 wrote:Thanks for the replies, I guess my question came from applying for CC's and the process online since it only usually takes a few seconds I assumed they pulled the report and see 800 score and that's enough to extend the credit. I know there are other factors but as I said I assumed the score was the main one they look at.
Well, in some cases depending on the lender, this could be true!
There are lenders that rely on a computer to decide yay or nay. If the computer determines you're border-line. Your app goes to a manual review.
As BBS stated, it can get rather complicated. Sometimes you're denied simply for catching a UW on the wrong day of the week. lol
No one knows the algorithms banks use, except those that write them.
Then you have lenders that are 100% manual reviews(most CUs). Those are the ones where scores probably don't hold as much weight.
Now it's pucker time, because they will comb through your file looking for anything that doesn't cut the mustard.
You can have 800 scores with no credit history of your own. There have been many people come to myfico looking for answers of a denial, that had nearly perfect scores, with no credit history to back up those scores.
A good example is my 18 yr old nephew with no credit history of his own, only an AU on two of my accounts. He had a 824 mortgage score from the start.
If he'd apped for a Chase CC, he'd have surely went down in flames! lol
Where at the same time, apping Navy Fed and Discover yielded instant approvals!
Some lenders use internal scoring. Some time those work in your favor and sometimes they do not.
@Anonymous wrote:As ITD observed earlier, income and existing debt matter a lot. It is quite possible to have half a million dollars in debt, no money in the bank, and no income -- and have a FICO 8 score in the 800s.
The score would be stellar but almost no lender or CC issuer would approve you for a loan or a credit card.
Heh, not even that black and white my friend.
If that 500k of debt is the remaining 31.25% of a mortgage which likely could be obtained from the address of record on the credit report and a quick Zestimate lookup on Zillow which implies 1.5 million in equity, sure they could and probably even would.
As others have said score is only one factor, but when talking CC's explicitly the fact is the minimum score that will be underwritten at is remarkably low, even in the mid-600's when talking FICO 8 on some of the cards which many people aspire to on this forum because they're some of the best in the credit market today.
That all said, from call it two database lookups and a credit report I can have a very clear idea of what an applicant's financial picture is, and the entire algorithmic process including the remote data queries can be handled in seconds.
