Fact or Fiction?

[Anonymous]

I was recently given the info that having the highest limit on your oldest card will help your profile.  I have several cards from the same issuer and wondered if that was true and if i should move some limits around so that the original card has the highest limit, or just leave it as is.  I have hunted the forums, but not really seeing anything that proves or disproves it. 

I have for the most part (recent BT) have low UTIL, so i wasnt sure if this was just a myth or does help. 

[Thomas_Thumb]

That fictional statement is not supported by data as it relates to Fico scoring algorithms. Account ages are factored independent of account CLs and account balances. Having some high CLs might be helpful for a manual review but, no real benefit for the high CL being on the oldest card.

That said, if you want to transfer CLs and consolidate # of accounts, generally best to keep your oldest account open. An exception to this may be if your oldest account has an annual fee, high APR and poor rewards if a newer card with the same bank has superior rewards and/or no AF.

[Anonymous]

A scoring benefit from your oldest card having the highest limit really wouldn't make any sense to me.  Having your highest limit on your oldest card doesn't in any way impact your risk factor IMO, so I don't see why the algorithm would care to take that into consideration.

[arkane]

Yep as others have said, definitely fiction.

However I do believe LexisNexis has reason codes for average CL <7K and <9K, so there's some remote partial truth that your CL may affect a score of some kind, just not FICO.

[Anonymous]

Right, that is true of LN, but even in saying that I do believe it has to do with average credit limit and that it has no bearing on oldest credit limit.  TT would be the best qualified to weigh in on that topic I'm sure.

[Anonymous]

I really figured it was, but never hurts to check..  

I keep hearing about LN lexisnexus?   what is it?

[Anonymous]

LexisNexis is a CRA, just like EQ, TU, and EX.  You can google that name to find out more about them.

There are actually dozens of CRAs.  Here is a list of most of them:

http://files.consumerfinance.gov/f/201604_cfpb_list-of-consumer-reporting-companies.pdf

LN makes a credit scoring model.  Its primary consumer is the insurance industry, who uses its credit score as one piece of information in deciding how much to charge a particular consumer for his premium.  FICO's and LN models have many things in common (derogs are bad, low CC utilization is good, high AAoA is good, etc.) but there are also ways that the the models are completely different.  Here are just a few:

*  FICO does not care at all about the size of any of your credit limits.  LN considers your Average Credit Limit, with a bigger ACL being better.  There is no benefit to having an ACL bigger than 10.5k

*  FICO doesn't care whether you have store cards.  LN penalizes you for having them.

*  FICO doesn't care whether you have auto accounts.  LN penalizes you for having them.  This would include accounts like Firestone, Goodyear, Autozone, Pepboys, etc.

*  LN looks at your oldest account and if it is a loan (rather than a credit card) you get a penalty.

Etc.

[Thomas_Thumb]

LexisNexis provides a credit based insurance score (CBIS) for Auto and one for Home/Property. They pull data from your Equifax (EQ) credit report and then import the data into their models to generate CBIS scores.