Got my card and credit score today

All about Discover & Diners Club - talk about their credit card deals such as the More, Miles, Escape, and others.
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MemberSince99
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Got my card and credit score today

Postby MemberSince99 » Mon Jul 08, 2013 6:14 pm

I was curious if I'd get a score for less than the best terms, and sure enough they gave me a score - 768 on EQ is what they gave.

I was like, how do you have a score that gets you the best possible terms on a mortgage, but not on a credit card, how does this make sense. Heck if I know.


flan
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Postby flan » Mon Jul 08, 2013 10:08 pm

MemberSince99 wrote:I was curious if I'd get a score for less than the best terms, and sure enough they gave me a score - 768 on EQ is what they gave.

I was like, how do you have a score that gets you the best possible terms on a mortgage, but not on a credit card, how does this make sense. Heck if I know.



Mortgage lenders are driven by the various US gov't entities that buy most of the mortgages, and they, being polite, are morons. They care about FICO scores, and very little else beyond income qualifications.

Credit card lenders are in a more competitive market, and do much more sophisticated underwriting. FICO[1] is used for binary yes/no decisions; limits, rates, and other account specific terms (do you get a Visa signature, or just a plat, even if you get a high limit? etc) are driven by other factors -- income, history with the issuer, apparent payment pattern on other accounts, and different weightings of the information used by fico, among others. For instance, many lenders apparently weight current history a lot higher than the FICO model does. They also tend to not care about closed accounts as much (or at all).

So Discover didn't give you a high limit, and less than the best rate, because they think they won't make money on you.

[1] that's the traditional FICO score that the gardeners in that other forum are so worried about. Alternative scoring comes from a number of sources; one of the big vendors: FICO. But they don't talk about that in public, because it would confuse people, and diminish the value of the brand.

Gamma
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Postby Gamma » Mon Jul 08, 2013 10:30 pm

Did they at least give you a decent apr rate after promo?

MemberSince99
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Postby MemberSince99 » Tue Jul 09, 2013 6:32 am

I do get they like you to carry a balance, flan, but by giving me a small limit compared to my higher limit cards, and less than the best terms, they kind of make it a self-fulfilling prophecy that they won't see heavy spend. Just something to think about. Why would I after they give me my smallest current limit and less than the best terms drop a lot of money on them as opposed to Chase, Amex, FNBO and even Associated?

I'm not trying to rehash things, just saying, these days these guys have to actually compete for my business. Once I had to take whatever I could get like we all do when we start. Now I have options, so if you want to be in the mix, it behooves you to be competitive if you want the swipes. If not, then you have nothing to complain about.

Gamma, they gave me 17.24%. Not the best terms. I really don't care since I have no plans to carry a balance with them or with any lender anyway. If I could choose between a higher limit or a lower APR I'd pick the higher limit every time.



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