Author Topic: Why is a High Credit Score Alone No Longer Enough??  (Read 8689 times)

joer1212

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Why is a High Credit Score Alone No Longer Enough??
« on: October 09, 2023, 09:38:35 AM »
Companies aren't satisfied by a high credit score alone. No, they want to know how many accounts you have open, the average age of those accounts, how many inquiries you've had over the past 2 years, the last time you opened or closed an account, how much credit you've used, what time of the day you urinate, etc.. If one or more of those factors aren't to their liking, they will deny you credit, despite your high score.

But doesn't your credit score already take all those factors into account? Isn't that the whole point of it? I mean, it's supposed to be a numerical representation of your creditworthiness based on all factors (which credit issuers redundantly judge you on).

My current FICO score is 819, and it's hovered around that number for many years. But that doesn't stop credit card companies from routinely denying me cards based on factors that my credit score has already accounted for. If those factors were negative, my score would be much lower, don't ya think? My high credit score is telling these credit card companies that I'm good; it's screaming at them, but the screams fall on deaf ears. It reminds me on that scene in Back to the Future, when Biff grabs McFly and knocks on his head: "HELLO? IS ANYBODY HOME?!".

So, what's the point of having a high credit score? It seems to have become a mere formality at this point, because credit issuers appear to judge you based on individual factors, not your creditworthiness as a whole.

It wasn't always like this.

As an example, I remember being in a motorcycle shop in 2005 to purchase a Kawasaki. I gave the salesman my name, and he literally glanced at his computer screen for about one second before telling me that I easily qualify to finance my vehicle. My credit score alone was final. He didn't engage in any of this nitpicking nonsense that's become standard practice today.





YttriumNitrate

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #1 on: October 09, 2023, 09:45:33 AM »
Companies aren't satisfied by a high credit score alone. No, they want to know how many accounts you have open, the average age of those accounts, how many inquiries you've had over the past 2 years, the last time you opened or closed an account, how much credit you've used, what time of the day you urinate, etc.. If one or more of those factors aren't to their liking, they will deny you credit, despite your high score. But doesn't your credit score already take all those factors into account?

Isn't credit score related to the likelihood of you paying back the loan? The credit card companies are more interested in whether they'll make a profit off you. If you're churning credit cards for the promos, it would be reasonable for companies to deny your application to improve their bottom line.

Morning Glory

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #2 on: October 09, 2023, 09:47:17 AM »
Companies aren't satisfied by a high credit score alone. No, they want to know how many accounts you have open, the average age of those accounts, how many inquiries you've had over the past 2 years, the last time you opened or closed an account, how much credit you've used, what time of the day you urinate, etc.. If one or more of those factors aren't to their liking, they will deny you credit, despite your high score. But doesn't your credit score already take all those factors into account?

Isn't credit score related to the likelihood of you paying back the loan? The companies are more interested in whether they'll make a profit off you. If you're churning credit cards for the promos, it would be reasonable for companies to deny your application to improve their bottom line.

Yep.
OP, look up the 5/24 rule.  It's better to do a few larger spend bo uses per year than multiple small ones.

uniwelder

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #3 on: October 09, 2023, 09:55:38 AM »
OP, maybe you should clarify.  It sounds like you're just frustrated with credit card companies, as you've already stated other businesses are fine with just the numerical score. 

kpd905

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #4 on: October 09, 2023, 10:06:03 AM »
Which company denied you?  Was it Chase for being over 5/24?

Michael in ABQ

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #5 on: October 09, 2023, 10:57:14 AM »
High credit score means less profitable customer - at least in terms of paying interest, paying late fees, etc.

It may mean you'll run more money through the card and rack up higher interchange fees which mostly go to the bank that issued the card. Those fees run about 1.5-2% of the total purchase amount (Visa, MC, Discover, Amex keep a much smaller amount). Also, those fees are higher for cards with better rewards.

As a merchant, if a customer pays with a plain vanilla Visa card with no rewards we might get charged about 1%. If someone uses a high-end rewards card like a Chase Sapphire Reserve card it could be as high as 2.5% (plus additional fees on top of that non-negotiable interchange fee).

Catbert

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #6 on: October 09, 2023, 11:48:29 AM »
In addition to Chase's 5/24 many credit card companies have additional limits on frequency of getting new card bonuses on identical cards or within a card family.  Amex won't give you a bonus if you've ever had a particular card.  All these are aimed at churners.  It sounds like you're trying to be a churner, are learning that there are lots of rules, but haven't yet taken the time to learn those rules.

GilesMM

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #7 on: October 09, 2023, 11:54:44 AM »
I agree - you have a legitimate complaint. Let us know what you find out.

Ron Scott

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #8 on: October 09, 2023, 12:52:37 PM »
I agree - you have a legitimate complaint. Let us know what you find out.

Per the Bard AI:

There are a number of reasons why people with high credit scores may be denied credit when they apply for a loan. Some of the most common reasons include:

Too much existing debt. Even if you have a good credit score, lenders may still deny you credit if you have too much existing debt. This is because they want to make sure that you can afford to repay the new loan in addition to your existing debt obligations.
Not enough income. Lenders will also consider your income when making a decision about whether or not to approve your loan application. If your income is too low, they may be concerned that you will not be able to afford to repay the loan.

Too many recent hard inquiries. When you apply for a loan, the lender will perform a hard inquiry on your credit report. This type of inquiry can temporarily lower your credit score by a few points. If you have too many hard inquiries on your credit report in a short period of time, lenders may be concerned that you are taking on too much debt.

Other factors. In addition to your credit score, income, and debt-to-income ratio, lenders may also consider other factors when making a decision about whether or not to approve your loan application. These factors may include your employment history, type of loan you are applying for, and the purpose of the loan.

It is important to note that lenders are not required to approve every loan application, even if the applicant has a high credit score. Lenders have their own underwriting criteria, and they may deny a loan application for any reason they choose, as long as it is not based on a discriminatory factor.

If you have been denied a loan despite having a high credit score, you should review your credit report carefully to make sure that there are no errors. You should also try to understand the lender's reasons for denying your application. Once you have a better understanding of the situation, you may be able to take steps to improve your chances of being approved for a loan in the future.

Here are some tips for improving your chances of getting approved for a loan, even if you have been denied in the past:

Pay down your existing debt. This will reduce your debt-to-income ratio and make you more attractive to lenders.

Avoid opening new credit accounts unless you absolutely need them. Each new credit application results in a hard inquiry on your credit report, which can temporarily lower your score.
Keep your credit utilization ratio low. This is the percentage of your available credit that you are currently using. A low credit utilization ratio shows lenders that you are responsible with credit.
Make sure that your credit report is accurate. You can get a free copy of your credit report from each of the three major credit bureaus once a year at annualcreditreport.com. Review your credit report carefully and dispute any errors.

Consider applying to multiple lenders. Different lenders have different underwriting criteria, so you may be more likely to be approved for a loan from one lender than another.
If you are still having trouble getting approved for a loan, you may want to consider working with a credit counselor or financial advisor. They can help you assess your financial situation and develop a plan to improve your credit score and get approved for the type of loan you need.

joer1212

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #9 on: October 09, 2023, 05:55:06 PM »
OP, maybe you should clarify.  It sounds like you're just frustrated with credit card companies, as you've already stated other businesses are fine with just the numerical score.
No, it's not just credit card companies.

A few years after my positive experience with the motorcycle dealer (who had been impressed with my score alone, and immediately extended credit to me at a good rate), I went to a Honda dealer to buy a car. My credit score was high, yet I wasn't able to get a good interest rate, like I was qualified to get. The salesman explained to me that, despite my stellar credit score, XYZ on my credit report (individual factors that my high credit score already reflected) was not optimal.

So, between 2005 and around 2008, the industry had changed, and they started nitpicking beyond your credit score alone. They starting mirroring the growing cynicism of society at large.
« Last Edit: October 09, 2023, 06:07:59 PM by joer1212 »

joer1212

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #10 on: October 09, 2023, 05:56:58 PM »
Companies aren't satisfied by a high credit score alone. No, they want to know how many accounts you have open, the average age of those accounts, how many inquiries you've had over the past 2 years, the last time you opened or closed an account, how much credit you've used, what time of the day you urinate, etc.. If one or more of those factors aren't to their liking, they will deny you credit, despite your high score. But doesn't your credit score already take all those factors into account?

Isn't credit score related to the likelihood of you paying back the loan? The credit card companies are more interested in whether they'll make a profit off you. If you're churning credit cards for the promos, it would be reasonable for companies to deny your application to improve their bottom line.
It's not just the credit card companies, though.

A few years after my positive experience with the motorcycle dealer (who had been impressed with my score alone, and immediately extended credit to me at a good rate), I went to a Honda dealer to buy a car. My credit score was high, yet I wasn't able to secure a good interest rate. The salesman explained to me that, despite my stellar credit score, XYZ on my credit report (individual factors that my high credit score already reflected) was not optimal.

So, between 2005 and around 2008, the industry had changed, and they started nitpicking beyond your credit score alone.

joer1212

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #11 on: October 09, 2023, 05:57:56 PM »
OP, look up the 5/24 rule.  It's better to do a few larger spend bo uses per year than multiple small ones.
That's exactly what I've been doing.

joer1212

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #12 on: October 09, 2023, 05:59:12 PM »
Which company denied you?  Was it Chase for being over 5/24?
Several credit card companies (Chase, Amex, Capital One, etc.). But this nitpicking phenomenon is not limited to banks. It's industry-wide.

joer1212

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #13 on: October 09, 2023, 06:02:29 PM »
In addition to Chase's 5/24 many credit card companies have additional limits on frequency of getting new card bonuses on identical cards or within a card family.  Amex won't give you a bonus if you've ever had a particular card.  All these are aimed at churners.  It sounds like you're trying to be a churner, are learning that there are lots of rules, but haven't yet taken the time to learn those rules.
I know all the rules. Been in this game for years. My beef is that, despite a high credit score AND complying with the rules, I still get denied. But, as I mentioned to other posters on here, this nitpicking is not just limited to banks, it's an industry-wide practice now. That was never the case.

joer1212

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #14 on: October 09, 2023, 06:07:23 PM »
I agree - you have a legitimate complaint. Let us know what you find out.

Per the Bard AI:

There are a number of reasons why people with high credit scores may be denied credit when they apply for a loan. Some of the most common reasons include:

Too much existing debt. Even if you have a good credit score, lenders may still deny you credit if you have too much existing debt. This is because they want to make sure that you can afford to repay the new loan in addition to your existing debt obligations.
Not enough income. Lenders will also consider your income when making a decision about whether or not to approve your loan application. If your income is too low, they may be concerned that you will not be able to afford to repay the loan.

Too many recent hard inquiries. When you apply for a loan, the lender will perform a hard inquiry on your credit report. This type of inquiry can temporarily lower your credit score by a few points. If you have too many hard inquiries on your credit report in a short period of time, lenders may be concerned that you are taking on too much debt.

Other factors. In addition to your credit score, income, and debt-to-income ratio, lenders may also consider other factors when making a decision about whether or not to approve your loan application. These factors may include your employment history, type of loan you are applying for, and the purpose of the loan.

It is important to note that lenders are not required to approve every loan application, even if the applicant has a high credit score. Lenders have their own underwriting criteria, and they may deny a loan application for any reason they choose, as long as it is not based on a discriminatory factor.

If you have been denied a loan despite having a high credit score, you should review your credit report carefully to make sure that there are no errors. You should also try to understand the lender's reasons for denying your application. Once you have a better understanding of the situation, you may be able to take steps to improve your chances of being approved for a loan in the future.

Here are some tips for improving your chances of getting approved for a loan, even if you have been denied in the past:

Pay down your existing debt. This will reduce your debt-to-income ratio and make you more attractive to lenders.

Avoid opening new credit accounts unless you absolutely need them. Each new credit application results in a hard inquiry on your credit report, which can temporarily lower your score.
Keep your credit utilization ratio low. This is the percentage of your available credit that you are currently using. A low credit utilization ratio shows lenders that you are responsible with credit.
Make sure that your credit report is accurate. You can get a free copy of your credit report from each of the three major credit bureaus once a year at annualcreditreport.com. Review your credit report carefully and dispute any errors.

Consider applying to multiple lenders. Different lenders have different underwriting criteria, so you may be more likely to be approved for a loan from one lender than another.
If you are still having trouble getting approved for a loan, you may want to consider working with a credit counselor or financial advisor. They can help you assess your financial situation and develop a plan to improve your credit score and get approved for the type of loan you need.
Your credit score already takes all of these factors into account! That's the whole point of having a credit score! Otherwise, if companies are going to nitpick individual factors, why bother having one? The credit score already did the nitpicking work for you. It's a numerical reflection of your overall creditworthiness.

GilesMM

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #15 on: October 09, 2023, 06:21:39 PM »
I agree - you have a legitimate complaint. Let us know what you find out.

Per the Bard AI:

There are a number of reasons why people with high credit scores may be denied credit when they apply for a loan. Some of the most common reasons include:

Too much existing debt. Even if you have a good credit score, lenders may still deny you credit if you have too much existing debt. This is because they want to make sure that you can afford to repay the new loan in addition to your existing debt obligations.
Not enough income. Lenders will also consider your income when making a decision about whether or not to approve your loan application. If your income is too low, they may be concerned that you will not be able to afford to repay the loan.

Too many recent hard inquiries. When you apply for a loan, the lender will perform a hard inquiry on your credit report. This type of inquiry can temporarily lower your credit score by a few points. If you have too many hard inquiries on your credit report in a short period of time, lenders may be concerned that you are taking on too much debt.

Other factors. In addition to your credit score, income, and debt-to-income ratio, lenders may also consider other factors when making a decision about whether or not to approve your loan application. These factors may include your employment history, type of loan you are applying for, and the purpose of the loan.

It is important to note that lenders are not required to approve every loan application, even if the applicant has a high credit score. Lenders have their own underwriting criteria, and they may deny a loan application for any reason they choose, as long as it is not based on a discriminatory factor.

If you have been denied a loan despite having a high credit score, you should review your credit report carefully to make sure that there are no errors. You should also try to understand the lender's reasons for denying your application. Once you have a better understanding of the situation, you may be able to take steps to improve your chances of being approved for a loan in the future.

Here are some tips for improving your chances of getting approved for a loan, even if you have been denied in the past:

Pay down your existing debt. This will reduce your debt-to-income ratio and make you more attractive to lenders.

Avoid opening new credit accounts unless you absolutely need them. Each new credit application results in a hard inquiry on your credit report, which can temporarily lower your score.
Keep your credit utilization ratio low. This is the percentage of your available credit that you are currently using. A low credit utilization ratio shows lenders that you are responsible with credit.
Make sure that your credit report is accurate. You can get a free copy of your credit report from each of the three major credit bureaus once a year at annualcreditreport.com. Review your credit report carefully and dispute any errors.

Consider applying to multiple lenders. Different lenders have different underwriting criteria, so you may be more likely to be approved for a loan from one lender than another.
If you are still having trouble getting approved for a loan, you may want to consider working with a credit counselor or financial advisor. They can help you assess your financial situation and develop a plan to improve your credit score and get approved for the type of loan you need.
Your credit score already takes all of these factors into account! That's the whole point of having a credit score! Otherwise, if companies are going to nitpick individual factors, why bother having one? The credit score already did the nitpicking work for you. It's a numerical reflection of your overall creditworthiness.


The credit score is just a shorthand or single number summing it all up. Nothing prevents lenders from digging into the details. They are also starting to use data analytics to further screen out those they prefer not to extend credit to. There is something they don’t like about your credit history.

joer1212

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #16 on: October 09, 2023, 06:51:05 PM »
The credit score is just a shorthand or single number summing it all up. Nothing prevents lenders from digging into the details. They are also starting to use data analytics to further screen out those they prefer not to extend credit to. There is something they don’t like about your credit history.
Then maybe it's time they scrap the whole concept of universal credit scores, created by the agencies, since it's obvious that every creditor now wants to be an agency themselves and create their own scores for their customers.
« Last Edit: October 09, 2023, 06:54:04 PM by joer1212 »

Ron Scott

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #17 on: October 09, 2023, 08:09:46 PM »
The credit score is just a shorthand or single number summing it all up. Nothing prevents lenders from digging into the details. They are also starting to use data analytics to further screen out those they prefer not to extend credit to. There is something they don’t like about your credit history.
Then maybe it's time they scrap the whole concept of universal credit scores, created by the agencies, since it's obvious that every creditor now wants to be an agency themselves and create their own scores for their customers.


Well, it’s still at least a a piece of the puzzle and “they” are still making money selling it so why would they scrap it?? It’s just a tool.

joer1212

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #18 on: October 09, 2023, 08:46:01 PM »
The credit score is just a shorthand or single number summing it all up. Nothing prevents lenders from digging into the details. They are also starting to use data analytics to further screen out those they prefer not to extend credit to. There is something they don’t like about your credit history.
Then maybe it's time they scrap the whole concept of universal credit scores, created by the agencies, since it's obvious that every creditor now wants to be an agency themselves and create their own scores for their customers.


Well, it’s still at least a a piece of the puzzle and “they” are still making money selling it so why would they scrap it?? It’s just a tool.
I guess so, but it just goes to show that striving to achieve a 'high credit score' isn't the panacea that people make it out to be.

GilesMM

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #19 on: October 09, 2023, 10:15:37 PM »
The credit score is just a shorthand or single number summing it all up. Nothing prevents lenders from digging into the details. They are also starting to use data analytics to further screen out those they prefer not to extend credit to. There is something they don’t like about your credit history.
Then maybe it's time they scrap the whole concept of universal credit scores, created by the agencies, since it's obvious that every creditor now wants to be an agency themselves and create their own scores for their customers.


Well, it’s still at least a a piece of the puzzle and “they” are still making money selling it so why would they scrap it?? It’s just a tool.
I guess so, but it just goes to show that striving to achieve a 'high credit score' isn't the panacea that people make it out to be.


I’m not so sure it about how a high score as much as it about NOT having a low score if you looking to borrow.

Telecaster

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #20 on: October 09, 2023, 11:31:29 PM »
Then maybe it's time they scrap the whole concept of universal credit scores, created by the agencies, since it's obvious that every creditor now wants to be an agency themselves and create their own scores for their customers.

What's the problem you are trying to solve? 

Ron Scott

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #21 on: October 10, 2023, 02:23:26 AM »
The credit score is just a shorthand or single number summing it all up. Nothing prevents lenders from digging into the details. They are also starting to use data analytics to further screen out those they prefer not to extend credit to. There is something they don’t like about your credit history.
Then maybe it's time they scrap the whole concept of universal credit scores, created by the agencies, since it's obvious that every creditor now wants to be an agency themselves and create their own scores for their customers.


Well, it’s still at least a a piece of the puzzle and “they” are still making money selling it so why would they scrap it?? It’s just a tool.
I guess so, but it just goes to show that striving to achieve a 'high credit score' isn't the panacea that people make it out to be.

I think the general population made a long strange trip to considering credit scores as personally valuable. When the use of credit scores became increasingly attractive to lenders and was occasionally abused the industry came under pressure to become more transparent to the public. They chose to view that call for transparency, and the political pressure that ensued, as a business opportunity. They could sell their credit scores to the public at large. Banks and other financial institutions jumped on the bandwagon, and now everybody can order credit scores that appear as colorful graphic circles. LOL— I give them “credit” for turning an obstacle into an opportunity.

I dont borrow money, and I have no idea what my credit score is. I do have a credit card, but I use it for convenience, charging everything I can regardless of price, signing up for automatic payments when possible, and linking it to Apple Pay on my phone too. I pay off the balance in full at the end of the month. All of this behavior has an effect on my credit score and I couldn’t care less.

I have been offered free access to credit score information by my bank, but I have no interest in accessing the information because I suspect the bank will use that as an indication of interest on my part, and start trying to sell me other useless financial information about myself.

Morning Glory

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #22 on: October 10, 2023, 06:16:31 AM »
I've heard of people being denied because they have too much available credit compared to their income.  If you have a lot of cards open it may help to close some or call and ask if they can lower your limit.  This will lower your score since part of it depends on the percent of available credit you are using when they take the snapshot,  however it may make you more likely to get approved.

Debt: income is another metric banks use which is not part of credit score.
« Last Edit: October 10, 2023, 06:18:10 AM by Morning Glory »

joer1212

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #23 on: October 10, 2023, 06:27:44 AM »
Then maybe it's time they scrap the whole concept of universal credit scores, created by the agencies, since it's obvious that every creditor now wants to be an agency themselves and create their own scores for their customers.

What's the problem you are trying to solve?
I'm not trying to "solve" anything. I am asking a question, which you can clearly see by the title of my thread.

Telecaster

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #24 on: October 10, 2023, 08:56:11 AM »
You said that credit scores should be scrapped because some lenders use other criteria in addition to credit scores.  So let's say they accept your plan and credit scores no longer exist.   What problem got solved?   How did you benefit?

Tigerpine

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #25 on: October 10, 2023, 09:59:02 AM »
Don't forget that credit scores were never designed to help consumers in the first place.  They were designed to help lenders.

Lenders have no obligation to approve your loan application.  At the end of the day, they're in the business of making money, not making loans.

joer1212

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #26 on: October 10, 2023, 10:42:20 AM »
You said that credit scores should be scrapped because some lenders use other criteria in addition to credit scores.  So let's say they accept your plan and credit scores no longer exist.   What problem got solved?   How did you benefit?
My point was that credit scores have become much less relevant than the average person tends to believe, because the vast majority of creditors create their own criteria to ascertain whether they want to extend credit to a borrower. [My original question asks] why has this become such a pervasive trend? It wasn't always like this.


joer1212

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #27 on: October 10, 2023, 10:45:27 AM »
I've heard of people being denied because they have too much available credit compared to their income.  If you have a lot of cards open it may help to close some or call and ask if they can lower your limit.  This will lower your score since part of it depends on the percent of available credit you are using when they take the snapshot,  however it may make you more likely to get approved.

Debt: income is another metric banks use which is not part of credit score.
   +1  Credit scores would ideally incorporate this factor, but it would be messy at best to accurately track.
« Last Edit: October 10, 2023, 11:43:25 AM by joer1212 »

joer1212

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #28 on: October 10, 2023, 10:48:05 AM »
Don't forget that credit scores were never designed to help consumers in the first place.  They were designed to help lenders.

Lenders have no obligation to approve your loan application.  At the end of the day, they're in the business of making money, not making loans.
True, but they don't seem to help businesses anymore either.

Morning Glory

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #29 on: October 10, 2023, 11:54:33 AM »
I've heard of people being denied because they have too much available credit compared to their income.  If you have a lot of cards open it may help to close some or call and ask if they can lower your limit.  This will lower your score since part of it depends on the percent of available credit you are using when they take the snapshot,  however it may make you more likely to get approved.

Debt: income is another metric banks use which is not part of credit score.
   +1  Credit scores would ideally incorporate this factor, but it would be messy at best to accurately track.

I do not think it would be fair for income to have an impact on credit scores, which are supposed to provide an approximation of how responsible one is with paying back loans.  This would really punish early retirees lol.

 It is a bit odd though that banks care a lot about income but little about assets, as if they think people will be more likely to blow all the money they have in the bank than to quit their jobs.

Catbert

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #30 on: October 10, 2023, 11:57:33 AM »
In addition to Chase's 5/24 many credit card companies have additional limits on frequency of getting new card bonuses on identical cards or within a card family.  Amex won't give you a bonus if you've ever had a particular card.  All these are aimed at churners.  It sounds like you're trying to be a churner, are learning that there are lots of rules, but haven't yet taken the time to learn those rules.
I know all the rules. Been in this game for years. My beef is that, despite a high credit score AND complying with the rules, I still get denied. But, as I mentioned to other posters on here, this nitpicking is not just limited to banks, it's an industry-wide practice now. That was never the case.

How does your income look in relation to the credit already extended to you?  Credit scores don't consider your income but credit card companies do.

If you're turned down for credit you will get official written notice as to the reason.  Granted, the reason is likely generic (e.g., too many recent inquiries).  What reason(s) are given?


joer1212

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #31 on: October 10, 2023, 02:43:52 PM »
It is a bit odd though that banks care a lot about income but little about assets, as if they think people will be more likely to blow all the money they have in the bank than to quit their jobs.
Yes, this irks me too. Net worth seems to have taken a back seat to "income" as a metric of determining wealth. Guess they want to encourage us to continue pushing the medieval grinding wheel.
« Last Edit: October 10, 2023, 02:49:25 PM by joer1212 »

joer1212

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #32 on: October 10, 2023, 02:46:01 PM »
In addition to Chase's 5/24 many credit card companies have additional limits on frequency of getting new card bonuses on identical cards or within a card family.  Amex won't give you a bonus if you've ever had a particular card.  All these are aimed at churners.  It sounds like you're trying to be a churner, are learning that there are lots of rules, but haven't yet taken the time to learn those rules.
I know all the rules. Been in this game for years. My beef is that, despite a high credit score AND complying with the rules, I still get denied. But, as I mentioned to other posters on here, this nitpicking is not just limited to banks, it's an industry-wide practice now. That was never the case.

How does your income look in relation to the credit already extended to you?  Credit scores don't consider your income but credit card companies do.

If you're turned down for credit you will get official written notice as to the reason.  Granted, the reason is likely generic (e.g., too many recent inquiries).  What reason(s) are given?
I don't remember, frankly, because I didn't receive a letter the last time I was turned down for a credit card about a year ago. It may have been lost in the mail (reasonable to suspect this, as other parties' mail frequently gets delivered to me), but my stated income is $110k, while my total credit is about $125k.
« Last Edit: October 10, 2023, 02:48:24 PM by joer1212 »

Duke03

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #33 on: October 10, 2023, 03:02:49 PM »
Do like I do and refuse to borrow money just pay cash.  I think it's absurd what information a mortgage company thinks they are entitled to. 8 years ago, during my last mortgage application it was around Christmas time, and I deposited $500 cash that was given to my family from different family members.  The mortgage broker said I'd need a letter from each family member claiming it was a gift and they wouldn't be helping me make any mortgage payments going forward.  This was on a deal I was putting over 300k down on... I quickly informed him that I wouldn't be getting any letters and his services where no longer needed.  He claimed without this I wouldn't pass underwriting and getting angry with him does no good. I once again explained that his services where no longer needed and to cancel everything I'll wire 100% of funds at closing.

Telecaster

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #34 on: October 10, 2023, 04:50:22 PM »
My point was that credit scores have become much less relevant than the average person tends to believe, because the vast majority of creditors create their own criteria to ascertain whether they want to extend credit to a borrower. [My original question asks] why has this become such a pervasive trend? It wasn't always like this.

It was always like this.   Many consumer protections were created so lenders couldn't deny credit for non-financial reasons.  Like living in the wrong neighborhood, for example.   Which certainly isn't part of your credit score.

joer1212

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #35 on: October 10, 2023, 05:50:02 PM »
My point was that credit scores have become much less relevant than the average person tends to believe, because the vast majority of creditors create their own criteria to ascertain whether they want to extend credit to a borrower. [My original question asks] why has this become such a pervasive trend? It wasn't always like this.

It was always like this.   Many consumer protections were created so lenders couldn't deny credit for non-financial reasons.  Like living in the wrong neighborhood, for example.   Which certainly isn't part of your credit score.
Well, I'm going by my own experiences-- one glance at my credit score, and I was approved. Happened multiple times, but it was many years ago.

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #36 on: October 10, 2023, 06:04:27 PM »
My point was that credit scores have become much less relevant than the average person tends to believe, because the vast majority of creditors create their own criteria to ascertain whether they want to extend credit to a borrower. [My original question asks] why has this become such a pervasive trend? It wasn't always like this.

It was always like this.   Many consumer protections were created so lenders couldn't deny credit for non-financial reasons.  Like living in the wrong neighborhood, for example.   Which certainly isn't part of your credit score.
Well, I'm going by my own experiences-- one glance at my credit score, and I was approved. Happened multiple times, but it was many years ago.

The times, they are a changin

No seriously it doesn't reflect on you at all. I have had 4 houses plus a few refinances in there and I still think the easiest one was in 2002 when I was 20 years old with a tip income and barely any credit.  They have to ask all kinds of bs now because the whole "big short" business ruined it for everyone.

Metalcat

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #37 on: October 11, 2023, 06:19:20 AM »
You said that credit scores should be scrapped because some lenders use other criteria in addition to credit scores.  So let's say they accept your plan and credit scores no longer exist.   What problem got solved?   How did you benefit?
My point was that credit scores have become much less relevant than the average person tends to believe, because the vast majority of creditors create their own criteria to ascertain whether they want to extend credit to a borrower. [My original question asks] why has this become such a pervasive trend? It wasn't always like this.

Perhaps the issue is that the average person needs to be educated that a credit score isn't the be all, end all??

We've had people come here and ask what financial benefits they're entitled to because they have great credit, and we're like "uh...maybe some debt?"

For whatever reason, folks seem to believe that credit scores are something they aren't.

Credit scores are just one measure. For some purposes, just that score is sufficient, for others it isn't.

A great credit score doesn't entitle anyone to anything, all it indicates is that you don't have a bad credit score. For some companies, just not having a bad score is sufficient for their information needs, for others it isn't.

For my cell phone company, all I needed was a not terrible credit score, for my mortgage company, I needed a lot more info.

That doesn't make me think the edit score is now useless.

Ron Scott

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #38 on: October 11, 2023, 10:33:41 AM »
It is a bit odd though that banks care a lot about income but little about assets, as if they think people will be more likely to blow all the money they have in the bank than to quit their jobs.
Yes, this irks me too. Net worth seems to have taken a back seat to "income" as a metric of determining wealth. Guess they want to encourage us to continue pushing the medieval grinding wheel.

LOL not understanding this comment.

Net Worth IS wealth and high income with high spending works AGAINST wealth creation.

And lenders aren’t trying to encourage you do to anything but pay your bills. Recurring/Disposable income is simply a better predictor of loan repayment than net worth.

Lending is a sophisticated, competitive, and highly regulated business and lenders rely on their repayment models. There is a HUGE amount of consumer debt out there so I’m not worried about lenders being cautious. 


reeshau

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #39 on: October 11, 2023, 01:14:51 PM »
My point was that credit scores have become much less relevant than the average person tends to believe, because the vast majority of creditors create their own criteria to ascertain whether they want to extend credit to a borrower. [My original question asks] why has this become such a pervasive trend? It wasn't always like this.

It was always like this.   Many consumer protections were created so lenders couldn't deny credit for non-financial reasons.  Like living in the wrong neighborhood, for example.   Which certainly isn't part of your credit score.
Well, I'm going by my own experiences-- one glance at my credit score, and I was approved. Happened multiple times, but it was many years ago.

The times, they are a changin

No seriously it doesn't reflect on you at all. I have had 4 houses plus a few refinances in there and I still think the easiest one was in 2002 when I was 20 years old with a tip income and barely any credit.  They have to ask all kinds of bs now because the whole "big short" business ruined it for everyone.

I got my last credit card in 2020, the year I FIRE'd.  The old bank got taken over by a new one, and ended no foreign transaction fees--probably my #1 item.  The only hassle I had was lifting my credit freeze; even though the agencies allow you a one-time / passcode protected peek, the banks all seem to demand totally opening up / risking junk mail, at the least.

No problems other than that.

joer1212

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #40 on: October 11, 2023, 07:15:37 PM »
It is a bit odd though that banks care a lot about income but little about assets, as if they think people will be more likely to blow all the money they have in the bank than to quit their jobs.
Yes, this irks me too. Net worth seems to have taken a back seat to "income" as a metric of determining wealth. Guess they want to encourage us to continue pushing the medieval grinding wheel.

LOL not understanding this comment.

Net Worth IS wealth and high income with high spending works AGAINST wealth creation.

LOL, what aren't you understanding? That's exactly what I said-- net worth>income.

Telecaster

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #41 on: October 11, 2023, 09:27:51 PM »
It is a bit odd though that banks care a lot about income but little about assets, as if they think people will be more likely to blow all the money they have in the bank than to quit their jobs.
Yes, this irks me too. Net worth seems to have taken a back seat to "income" as a metric of determining wealth. Guess they want to encourage us to continue pushing the medieval grinding wheel.

No reason to be irked.  This is not hard to understand.  A big performing loan makes more money for the lender than a small performing loan. 

Morning Glory

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #42 on: October 12, 2023, 07:44:47 AM »
It is a bit odd though that banks care a lot about income but little about assets, as if they think people will be more likely to blow all the money they have in the bank than to quit their jobs.
Yes, this irks me too. Net worth seems to have taken a back seat to "income" as a metric of determining wealth. Guess they want to encourage us to continue pushing the medieval grinding wheel.

No reason to be irked.  This is not hard to understand.  A big performing loan makes more money for the lender than a small performing loan.

 It's perfectly reasonable to be annoyed by having to do a bunch of extra paperwork even if you understand the reason behind it.

Metalcat

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #43 on: October 12, 2023, 07:47:51 AM »
It is a bit odd though that banks care a lot about income but little about assets, as if they think people will be more likely to blow all the money they have in the bank than to quit their jobs.
Yes, this irks me too. Net worth seems to have taken a back seat to "income" as a metric of determining wealth. Guess they want to encourage us to continue pushing the medieval grinding wheel.

No reason to be irked.  This is not hard to understand.  A big performing loan makes more money for the lender than a small performing loan.

 It's perfectly reasonable to be annoyed by having to do a bunch of extra paperwork even if you understand the reason behind it.

I agree. I understand why my mortgage company made me Juno through hoops, but it was super annoying.

What doesn't make sense it to say that because it's annoying there must be something wrong with it and it should be scrapped.

A lot of things make sense and are annoying, but that's not necessarily reason to get angry.

ChpBstrd

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #44 on: October 12, 2023, 07:48:25 AM »
It is a bit odd though that banks care a lot about income but little about assets, as if they think people will be more likely to blow all the money they have in the bank than to quit their jobs.
Yes, this irks me too. Net worth seems to have taken a back seat to "income" as a metric of determining wealth. Guess they want to encourage us to continue pushing the medieval grinding wheel.
Yea, but have you met most people? They blow all the money they have in the bank all the time.

GuitarStv

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #45 on: October 12, 2023, 08:15:25 AM »
I agree - you have a legitimate complaint. Let us know what you find out.

Per the Bard AI:

There are a number of reasons why people with high credit scores may be denied credit when they apply for a loan. Some of the most common reasons include:

Too much existing debt. Even if you have a good credit score, lenders may still deny you credit if you have too much existing debt. This is because they want to make sure that you can afford to repay the new loan in addition to your existing debt obligations.
Not enough income. Lenders will also consider your income when making a decision about whether or not to approve your loan application. If your income is too low, they may be concerned that you will not be able to afford to repay the loan.

Too many recent hard inquiries. When you apply for a loan, the lender will perform a hard inquiry on your credit report. This type of inquiry can temporarily lower your credit score by a few points. If you have too many hard inquiries on your credit report in a short period of time, lenders may be concerned that you are taking on too much debt.

Other factors. In addition to your credit score, income, and debt-to-income ratio, lenders may also consider other factors when making a decision about whether or not to approve your loan application. These factors may include your employment history, type of loan you are applying for, and the purpose of the loan.

It is important to note that lenders are not required to approve every loan application, even if the applicant has a high credit score. Lenders have their own underwriting criteria, and they may deny a loan application for any reason they choose, as long as it is not based on a discriminatory factor.

If you have been denied a loan despite having a high credit score, you should review your credit report carefully to make sure that there are no errors. You should also try to understand the lender's reasons for denying your application. Once you have a better understanding of the situation, you may be able to take steps to improve your chances of being approved for a loan in the future.

Here are some tips for improving your chances of getting approved for a loan, even if you have been denied in the past:

Pay down your existing debt. This will reduce your debt-to-income ratio and make you more attractive to lenders.

Avoid opening new credit accounts unless you absolutely need them. Each new credit application results in a hard inquiry on your credit report, which can temporarily lower your score.
Keep your credit utilization ratio low. This is the percentage of your available credit that you are currently using. A low credit utilization ratio shows lenders that you are responsible with credit.
Make sure that your credit report is accurate. You can get a free copy of your credit report from each of the three major credit bureaus once a year at annualcreditreport.com. Review your credit report carefully and dispute any errors.

Consider applying to multiple lenders. Different lenders have different underwriting criteria, so you may be more likely to be approved for a loan from one lender than another.
If you are still having trouble getting approved for a loan, you may want to consider working with a credit counselor or financial advisor. They can help you assess your financial situation and develop a plan to improve your credit score and get approved for the type of loan you need.

This is a great example of why AI currently sucks.  It ignores the actual intent of the original question in order to spew out useless but vaguely related information.  What a waste of time.

Metalcat

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #46 on: October 12, 2023, 08:29:28 AM »

This is a great example of why AI currently sucks.  It ignores the actual intent of the original question in order to spew out useless but vaguely related information.  What a waste of time.

Ugh, so true.

So many classmates were talking about how ChatGPT was helping them get idea for where to start with papers and I spent so much time fascinated, trying to get it to give me something, anything useful because I write essentially a paper a week and it was so fucking useless.

One time it was useful in helping me figure out some good key words to use for my library search, but that was it. It saved me about 20 minutes of work on a 12 page paper.

It's like talking to a pseudo-intellectual who likes to hear themselves blather on about whatever they think they know that's only tangentially related to what you're actually talking about and half of their facts and most of their references are made up.

GuitarStv

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #47 on: October 12, 2023, 08:37:26 AM »
It's like talking to a pseudo-intellectual who likes to hear themselves blather on about whatever they think they know that's only tangentially related to what you're actually talking about and half of their facts and most of their references are made up.

Yes!  The Jordan Peterson effect . . .

Metalcat

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #48 on: October 12, 2023, 08:54:45 AM »
It's like talking to a pseudo-intellectual who likes to hear themselves blather on about whatever they think they know that's only tangentially related to what you're actually talking about and half of their facts and most of their references are made up.

Yes!  The Jordan Peterson effect . . .

Lol!

Telecaster

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Re: Why is a High Credit Score Alone No Longer Enough??
« Reply #49 on: October 12, 2023, 11:34:12 AM »
It's perfectly reasonable to be annoyed by having to do a bunch of extra paperwork even if you understand the reason behind it.

Like writing your income in box?   If you are being irked by things like that you are doing life wrong.