What score is "enough"?

[EW800]

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@Anonymous wrote:

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@Anonymous wrote:

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Asked FNBO for a credit limit increase on my card with a score in the 800s and they said "NO". Now if that doesn't just make you wonder? As others have posted the high scores do not guarantee approval.

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Credit scores IMO aren't in the top 3 or maybe not even the top 5 in the list of factors considered by a lender for a CLI.

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I agree completely.  It is just one piece of the big puzzle.  

[difringe]

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@Anonymous wrote:

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@Anonymous wrote:

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Asked FNBO for a credit limit increase on my card with a score in the 800s and they said "NO". Now if that doesn't just make you wonder? As others have posted the high scores do not guarantee approval.

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Credit scores IMO aren't in the top 3 or maybe not even the top 5 in the list of factors considered by a lender for a CLI.

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Curious about this; what do you think are the top 3-5 factors considered by a lender for a CLI if credit score isn't one of them?

[Ardecko]

When they pull your credit, they get the whole file. So while the credit score may not be directly used, all the things that went into generating it more than likely are.

Each lender has their own proprietary grading scale, that includes data from your report, your income, your other history with them, and anything else they can dig up. They could possibly include demographic information from your ZIP code (unless there are laws against that, which I am not qualified to speak to).

It wouldn't surprise me for them to use that data to put you into a category that they then cross reference their own risk tolerance for to see if *they* are overextended in that market. (Meaning they could just decide they don't need you right now, even if you might be an otherwise good fit.)

[Anonymous]

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@difringe wrote:

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Curious about this; what do you think are the top 3-5 factors considered by a lender for a CLI if credit score isn't one of them?

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Shooting from the hip in no particular order, I'd say the following matter more than credit score under most circumstances:

• Income
• How much you use the card currently, in particular your spend relative to your current limit
• Time elements, such as length of time since last CLI, length of time you've had the trade line, history with that lender, etc.
• Whether or not you're a Transactor or a Revolver, which in turn determines your payment pattern
• Presence (or absence) of negative items on your CR
• Your current utilization, both with the potential CLI request trade line and of course aggregate

I'm sure there are others as well that are more important, but that's what comes to mind quickly for me anyway.

[difringe]

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@Anonymous wrote:

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@difringe wrote:

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Curious about this; what do you think are the top 3-5 factors considered by a lender for a CLI if credit score isn't one of them?

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Shooting from the hip in no particular order, I'd say the following matter more than credit score under most circumstances:

• Income
• How much you use the card currently, in particular your spend relative to your current limit
• Time elements, such as length of time since last CLI, length of time you've had the trade line, history with that lender, etc.
• Whether or not you're a Transactor or a Revolver, which in turn determines your payment pattern
• Presence (or absence) of negative items on your CR
• Your current utilization, both with the potential CLI request trade line and of course aggregate

I'm sure there are others as well that are more important, but that's what comes to mind quickly for me anyway.

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Somehow missed this response, but OK, this makes sense. So rather than the score that attempts to quantify a group of factors, they look at some of the individual factors along with stuff particular to that lender (and of course income becomes relevant when looking at credit limits). Thanks!

[Anonymous]

The reason to me that score in and of itself isn't a very relevant factor is that an infinite number of profiles can produce the same score.  Take two 750 scores, for example.  One could be a thick/aged/dirty file where the other could be a thin/young/clean file.  My thick/aged/filthy (4 dirty accounts with as high as 120 day lates) file was able to produce FICO 8 scores in the 750-768 range.  Conversely, someone with under a year of credit history and just a couple of accounts can arrive a the same score on a clean file.  This really comes down to lender specific consideration as to what they perceive as the greater risk or "better" customer.  It's also well documented that certain lenders like Discover for example have had people with 800-850 scores getting denied for CLI's all the time, but others with 670-720 scores get approved for them because they're more of the "ideal" or target customer. 

It's also worth bringing up again that we're talking CLIs here, not account approvals.  Approvals (or denials) for new accounts will certainly look at credit score and weigh it more heavily than a mere CLI request for an already existing account. 

[Anonymous]

Experian has a lot of 'risk management' solutions for lenders that talk about identifying the most profitable customers: http://www.experian.com/business-services/risk-management.html

For example:

"Behavioral Insight"

"Use this insight to:

• Avoid consumers who are likely to transfer their balances before you reach your breakeven point
• Maximize profitability by targeting consumers who will activate and revolve balances
• Build relationships [so you can sweet talk them into carrying a balance lol] with transactors [i.e., 'deadbeats' or those who always pay their balance in full] by offering your best rewards programs"

I am so new to credit that this month is the first full billing cycle on my own credit card in my life. The only reason I am even in this 'credit game' is because I need to borrow a large sum of money to buy a house in a few years. Using advice from my trusted financial advisers -  Warren Buffett and John Bogle (R.I.P.) - I've learned a lot about fiscal responsibility. (Never date day-traders, for one. lol)

There is nothing about this credit game that has anything to do with fiscal responsiblity. lol Ok, that's an exaggeration, but I mean, seriously, I have a salary of $68,000 and I now have a combined credit limit of $8500 on 2 cards which exceeds my ability to 'pay in full' using only my take home pay for one billing cycle. At least my non-profit credit union was 'smart' about it and used an approximation of what I put through my checking account each month as a starting point for a probationary period credit limit of $2000 (with FICO 8 at 728 at the time of application). But I'm a 'deadbeat' because I'm always going to keep my utilization low and pay my balance in full each month.

I keep reading that the average American is carrying around $6000-$7000 in revolving balances today. I can't 'look down' on those people or tell them they are being fiscally irresponsible either,  because I know for certain that if I had kids, a car payment, and the typical home-ownership associated costs that are greater than my monthly rent, I would no doubt be carrying some sort of balance on credit cards month-to-month with my salary.

I hear from people all the time that I 'don't do anything fun' because I have been saving practically all of my take-home pay after non-discretionary expenses in index funds for retirement, and savings for a 20% down payment on a house. It's taken several years to build that up, and there's no way I'd have saved so much if there were additional factors like those I mentioned above, or if I had some health related complication. It's probably half 'personal responsibility' and half 'luck', basically.

"It's not how much you make, it's how much you save." That, to me, is so much more important than a credit score, and yet, the credit score is still very important. I only started to realize this about a year and a half ago. You just never know what bad things might happen in life, and it's better to have a 750 than a 600 if something goes south.

I would liken it to a hotel star rating. If your credit is only 580-620, than you're like a 2 star hotel; people might stay there, but only in a pinch. Conversely, if your score is well into the 800's; you're a walking, talking, breathing, virtuous, 5 star resort... and you can expect to be treated as such.

So, would you rather be thought of in terms of a Motel 8... or a Waldorf Astoria? There's really no contest. Go big or go home. But, you can certainly get by as a Garden Inn, or Residence Inn. People can work with that.

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LOL @ Motel 8. Literally.