Why worry about inquiries when you're approved for credit

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Vermonster
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Re: Why worry about inquiries when you're approved for credit

Postby Vermonster » Wed Apr 29, 2015 5:57 pm

Imagine what some of those scores would be if they had, say 1 or 2 inqs. That's what people don't get. Yes you can get a $500 limit store card, or if they could wait 2 years, they could be getting $5,000+ prime lender cards. They put a lot of effort into something that offers no rewards. I think coupon clippers have a healthier mindset than some of these "appers."
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kdm31091
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Re: Why worry about inquiries when you're approved for credit

Postby kdm31091 » Wed Apr 29, 2015 6:00 pm

Vermonster wrote:Immagine what some of those scores would be if they had, say 1 or 2 inqs. That's what people don't get. Yes you can get a $500 limit store card, or if they could wait 2 years, they could be getting $5,000+ prime lender cards. They put a lot of effort into something that offers no rewards. I think coupon clippers have a healthier mindset than some of these "appers."


Exactly. You are definitely on the same page as me. While the person in question was able to get approvals, I have no doubt they'd get better approvals if they waited.

To be honest it is an addiction and it is really kind of sad. When you are at that point, where you have that level of inquiries and no real intention of stopping (she "gardens" for about a week at a time)...you need help, IMO

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Re: Why worry about inquiries when you're approved for credit

Postby Nixon » Wed Apr 29, 2015 6:01 pm

Vermonster wrote:Immagine what some of those scores would be if they had, say 1 or 2 inqs. That's what people don't get. Yes you can get a $500 limit store card, or if they could wait 2 years, they could be getting $5,000+ prime lender cards. They put a lot of effort into something that offers no rewards. I think coupon clippers have a healthier mindset than some of these "appers."


I'm about the signup bonuses myself. I know I could still get approved for any number of low end cards all day but with my dwindling AAoA and no chance to get new backdated Amices, It would be reckless and stupid to expose myself to potential AA for little to no rewards.

Now, once my newest zombie falls off my report in January, along with 3 more inquiries on EX, I should be prime to go on another app-o-rama next year.
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takeshi
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Re: Why worry about inquiries when you're approved for credit

Postby takeshi » Thu Apr 30, 2015 10:56 am

oldsoldier wrote:I noticed that it seems a lot of guys here and other sites worry alot about inquiries. I was wondering why it would even bother you if you were approved for the card you applied.

Consider the source. Credit forum sites have a lot of people that are building or rebuilding credit. HP's have more of an impact for those with thin and poor profiles.

I don't fret over a single HP. IIRC I have at least 13 with EQ. For my profile a single HP doesn't really have that much impact.

oldsoldier wrote:Wouldn't the new CL help your credit score more than the inquiry and new account hurt it?

It really depends on one's credit and the specifics of the new account. There isn't a one-size-fits-all answer to that question. Some may see a drop. Some may see not much or any change. Some might see an improvement.

CarefulBuilder14 wrote:To what extent do others think "too many inquiries" is partly a go-to excuse in the event an issuer feels "swipe envy"? Is "too many inquiries" just a nicer / more legal way of saying, "it's clear that you focus your spending on other cards, and you're not going to generate much transaction revenue for us, now or in the near future, and we just don't want to bother with you or risk taking a big loss in case you go broke"?

It's the risk associated with credit seeking behavior.

HP's and swipes are two entirely different things. First off, HP's aren't just for credit cards.

Nixon wrote:I can understand the concern with inquiries, but if you clearly show a history of ability to repay, this should be taken into account. I agree that inquiry counts and recent history with respect to requests for credit is mostly a "catchall" for certain lenders.

It's the reason why I can't get in with Citi.

It is taken into account. HP's are not the only factor considered and for most they're a relatively small factor. If HP's are getting cited then one has other issues with one's credit in the eyes of the creditor. It's not just the HP's.

oldsoldier wrote:What I should be looking at is the whole credit picture not just score.

Exactly. It's never just about score or any individual factor.

kdm31091 wrote:Well....it stops mattering sort of...we still can't say whether you will get prime, quality, good approvals with decent limits and APR with that many inqs. All we can say is you can get approved for something sometimes...lol

^ This. Just getting approved is a low bar. It's not just the approval but the limit, APR, etc that one qualifies for.

kdm31091 wrote:To be honest it is an addiction and it is really kind of sad. When you are at that point, where you have that level of inquiries and no real intention of stopping (she "gardens" for about a week at a time)...you need help, IMO

I'm not trying to belittle eating disorders with this comment but gardening and spreeing is just too much like binging and purging to me. IMO there's really no need for gardening. Apply for what you need/want when your credit is in the proper shape to do so but this has to be done in moderation. If you're in a cycle of alternating between severely limiting behavior and then compulsively acting then there is probably a problem that needs to be addressed.

That said, I know very little on addictive and compulsive behavior.

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Re: Why worry about inquiries when you're approved for credit

Postby Ghoshida » Fri May 01, 2015 12:26 am

takeshi wrote:
kdm31091 wrote:To be honest it is an addiction and it is really kind of sad. When you are at that point, where you have that level of inquiries and no real intention of stopping (she "gardens" for about a week at a time)...you need help, IMO

I'm not trying to belittle eating disorders with this comment but gardening and spreeing is just too much like binging and purging to me. IMO there's really no need for gardening. Apply for what you need/want when your credit is in the proper shape to do so but this has to be done in moderation. If you're in a cycle of alternating between severely limiting behavior and then compulsively acting then there is probably a problem that needs to be addressed.

That said, I know very little on addictive and compulsive behavior.


Great post, this.

I have always liked how you post very balanced views; I personally do tend to get overboard while posting sometimes.

However you would probably agree that credit is just like any other "possession" in the sense that individuals either need it, want it, or feel proud having it. Just like any other possession, people might get (a little to a lot) irrational with it.

Certain channeled actions (gardening, planned sprees) help in these cases.
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Re: Why worry about inquiries when you're approved for credit

Postby Ghoshida » Fri May 01, 2015 12:27 am

kdm31091 wrote:
Nixon wrote:
CarefulBuilder14 wrote:Also, once a person has about 10 inquiries on a report, additional inquiries don't do much to change the FICO. The FICO harm of going from 0 to 10 inquiries is, I think, greater than the marginal FICO harm of going from 10 to 30. This leads some people with 10+ inquiries to feel that the damage is done, and that they might as well incur a few more HPs for CLIs or new cards.

I have 6 on Experian, only 2 of which will fall off in the next year. Most of the cards I'm considering pull Experian, so that gives me a little pause before applying. Anecdotally, it does seem that Experian is less sensitive to inquiries than the other CRAs are.



Right.

There is a member over on MF that has the max number of EQ/TU inquiries and over 50 on EX and continues to get approvals....WITH a BK7 2 years ago!


You have to remember this is the Internet. People can say whatever they want. Doesn't make it true. To be honest, I am about 98% sure that person is not being truthful. There is no way someone has almost $150k in available credit and all those inquiries so soon after BK. (and yes, I know exactly who you're talking about lol)


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CarefulBuilder14
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Re: Why worry about inquiries when you're approved for credit

Postby CarefulBuilder14 » Fri May 01, 2015 10:42 pm

takeshi wrote:
CarefulBuilder14 wrote:To what extent do others think "too many inquiries" is partly a go-to excuse in the event an issuer feels "swipe envy"? Is "too many inquiries" just a nicer / more legal way of saying, "it's clear that you focus your spending on other cards, and you're not going to generate much transaction revenue for us, now or in the near future, and we just don't want to bother with you or risk taking a big loss in case you go broke"?

It's the risk associated with credit seeking behavior.

HP's and swipes are two entirely different things. First off, HP's aren't just for credit cards.

I'm well aware of the difference between HPs and swipes, takeshi.

I'll risk insulting your intelligence, for a change, to give an overly detailed explanation of what I mean. Maybe someone has experience with this.

To be clear, I have never applied for a Discover Miles card. My experience with Discover has been quite positive. I don't know if Discover would act like this. This is purely a hypothetical extension of my credit situation, into which Discover conveniently fits.

When I first got my Discover It, I used it a lot. As I got other cards, my usage fell. Now, I use it almost exclusively for 5% stuff. I've changed my card design, and I call for extra rewards. That costs them money in the form of cash rewards, postage, and employee time. I'm unprofitable for them. They can analyze the spending I put through the card, as well as SP me, and easily conclude that I now favor other cards for purchases where I cannot earn special rewards. They don't earn interest or late fees from me, so it hurts them when they pay me 5%+ in rewards.

Let's say I were to apply for the Discover Miles card. When they looked at my credit report and also reviewed my It spending, they could probably (correctly) conclude that my use of the card would fall after the first year and that I'd use the Wifi benefit without giving them any substantial business in the long run.

If they pulled Equifax, they would only see one HP - their own pull from March 2014.

It seems possible they would decline me for the Miles, because I'm unprofitable. It probably is a rational business decision. But how often does anyone get an AA letter that says "we cannot offer you more credit because in the past you've only used us for special rewards and we think we'll lose even more money on you"?

If they actually put that on an AA letter, they might worry that I'd post it online. That could be bad for them. It's much more sensible to just say that my 1 inquiry is 1 too many. It's not sound logic, but it perhaps makes them look better than if they gave the truth.
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Re: Why worry about inquiries when you're approved for credit

Postby Vermonster » Sat May 02, 2015 7:56 am

I think a lot of people refer to that as "internal scoring." You might have an 850 Fico, but Discover sees your account as a business liability. You maximize the benefits of the card and offer nothing in return (other than never defaulting). Discover needs a certain number of cardholders like that, but they don't want to go out of their way to extend credit to you. It might be different if you were applying for a card with an AF. Which is sort of why I think Amex charge cards are so easy to get.
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CarefulBuilder14
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Re: Why worry about inquiries when you're approved for credit

Postby CarefulBuilder14 » Sat May 02, 2015 11:38 am

Vermonster wrote:I think a lot of people refer to that as "internal scoring." You might have an 850 Fico, but Discover sees your account as a business liability. You maximize the benefits of the card and offer nothing in return (other than never defaulting). Discover needs a certain number of cardholders like that, but they don't want to go out of their way to extend credit to you. It might be different if you were applying for a card with an AF. Which is sort of why I think Amex charge cards are so easy to get.

When I've read about others encountering AA due to "a low internal score", it can usually be taken to mean, "Your old baddies with us may have dropped off your report, but we haven't forgotten about them." I can see how selective, rewards-based spending could certainly factor into a lower internal score. I've just not encountered a case where it was clearly the primary factor that led to AA.

My understanding of internal scoring for most lenders is that the biggest weight, by far, is your payment history with that particular lender.
For example: John Doe burned Amex in 1995. John Doe had several defaults in 2010, burning every lender except Chase. John Doe might have a high internal score with Chase and a low one with Amex.
Chase doesn't seem to care much about "swipe loyalty" whereas Amex and Discover do seem to value it based on the CLs/CLIs they give. I just don't know at what point selective rewards spending could lead to AA for someone with a low-risk credit report and payment history.
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Re: Why worry about inquiries when you're approved for credit

Postby Vermonster » Sat May 02, 2015 2:04 pm

CarefulBuilder14 wrote:When I've read about others encountering AA due to "a low internal score", it can usually be taken to mean, "Your old baddies with us may have dropped off your report, but we haven't forgotten about them." I can see how selective, rewards-based spending could certainly factor into a lower internal score. I've just not encountered a case where it was clearly the primary factor that led to AA.

My understanding of internal scoring for most lenders is that the biggest weight, by far, is your payment history with that particular lender.
For example: John Doe burned Amex in 1995. John Doe had several defaults in 2010, burning every lender except Chase. John Doe might have a high internal score with Chase and a low one with Amex.
Chase doesn't seem to care much about "swipe loyalty" whereas Amex and Discover do seem to value it based on the CLs/CLIs they give. I just don't know at what point selective rewards spending could lead to AA for someone with a low-risk credit report and payment history.


I don't think selective spending to maximize benefits will cause any AA, but I also don't think it will help if you want another card.
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