A Question About Existing Lender "Quality" On Credit Reports

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CarefulBuilder14
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A Question About Existing Lender "Quality" On Credit Reports

Postby CarefulBuilder14 » Thu May 08, 2014 8:11 pm

I have read that when lenders are considering extending new credit and reviewing a borrower's credit report, they will look not just at the behavior of the borrower, but also at the institutions which have previously dealt with the borrower. I would like to know:

1. Is it true, for example, that generally a lender would rather see a potential borrower having a plain (no annual fee, unsecured, no rewards) credit card from a lender like Bank of America (with a reputation for having mostly prime borrowers) as opposed to a card with identical terms from Capital One (with a mix of prime and sub-prime borrowers)?

2. Is it possible that the 'prejudice' against sub-prime lenders would affect a FICO score? Or would this just be an additional subjective factor a lender would look at in addition to a FICO score?

Thank you

I need to create a signature but I use a Chase Freedom and Discover It. My credit history is clean but too short to have a FICO score. CK 728.
Love: IHG, Platinum, Sallie Mae, AA Plat, CSP
Like: Discover, ED, BCE, Hyatt, Arrival, Freedom
Might drop: BrooksBros, Prestige (Costco PC?)
Might add: Proper business card, CSR, Ritz, Delta Gold
Letting new accounts cool off since May
Really not sure what I'll add next or when


MemberSince99
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Postby MemberSince99 » Fri May 09, 2014 7:04 am

1. Yes the prime lenders are known to not think much of say First Premiere (but then even most of their customers don't think much of them).


2. No it doesn't really affect your score. I mean your score weighs a lot of factors your score doesn't care who the lender is.


If you are in prime cards now, why are you worried? No one is going to say "Oh all you have is a Freedom and an IT? What a loser you are man". You have no reason to apply for Credit One or First Premiere so I'm not sure why it's even a concern unless you have them now and if you do, dump them you don't need them. Otherwise it's just more "well what are the odds that an asteroid will take out my house today while I'm at work...."

takeshi
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Postby takeshi » Fri May 09, 2014 10:31 am

CarefulBuilder14 wrote:Is it true, for example, that generally a lender would rather see a potential borrower having a plain (no annual fee, unsecured, no rewards) credit card from a lender like Bank of America (with a reputation for having mostly prime borrowers) as opposed to a card with identical terms from Capital One (with a mix of prime and sub-prime borrowers)?

All depends on the specific creditor. Be careful relying on broad generalizations.

AF is just AF. It's not a prime/subprime indicator as there are many prime cards with AF's. AF's are not indicated on one's report IIRC. Rewards aren't going to be indicated on one's report either. You can verify this yourself by pulling your own reports.

CarefulBuilder14 wrote:Is it possible that the 'prejudice' against sub-prime lenders would affect a FICO score? Or would this just be an additional subjective factor a lender would look at in addition to a FICO score?

Take a look for yourself:
http://www.myfico.com/crediteducation/whatsinyourscore.aspx

A given creditor's criteria is an entirely separate thing from FICO scoring. FICO doesn't care who the creditor is. Creditors can be picky about any number of things in one's report such as: cards reported as secured, the creditors in one's report, utilization, number of inquiries, number of new accounts, increases in reported balances, etc etc.

CarefulBuilder14 wrote:I need to create a signature but I use a Chase Freedom and Discover It. My credit history is clean but too short to have a FICO score. CK 728.

How did you get them without a FICO score? Are you an AU on them?

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CarefulBuilder14
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Postby CarefulBuilder14 » Fri May 09, 2014 12:08 pm

Thank you for the information!

MemberSince99 wrote:If you are in prime cards now, why are you worried?"

I'm not worried, just eager to learn more. :) I understand the most important thing to do right now is to use the cards I already have responsibly and give them time.
takeshi wrote:How did you get them without a FICO score? Are you an AU on them?

My first application for any sort of credit was in 2012 for Brooks Brothers credit card. I was declined.

In late 2013 I applied for the Chase Freedom and was approved with a $600 limit. I know it may be a little unusual to get this as a first source of credit. I had been a Chase checking customer for a few years, only using a debit card out of irrationally excessive fear of the dangers of credit cards. Maybe they just figured that if I was steadily keeping about $6k with them in checking, it would be unlikely that I'd do serious damage with a $600 limit.

The card is getting close to the 6-month point where some people I've read get an automatic CLI. I'm definitely not going to be the one to ask them, though, as I expect another hard pull would hurt somebody with such a short credit history.

The Discover It I got in early 2014, mainly for the access to my FICO score (before I became aware I didn't even have one) and to hopefully earn some rewards on transactions over $600 I would otherwise pay with debit. I was initially declined for having too thin a credit history. I reapplied jointly with a parent and got a $2000 limit.

With lots of expenses, I usually PIF every 10 days or so to prevent the utilization from getting high.
Love: IHG, Platinum, Sallie Mae, AA Plat, CSP
Like: Discover, ED, BCE, Hyatt, Arrival, Freedom
Might drop: BrooksBros, Prestige (Costco PC?)
Might add: Proper business card, CSR, Ritz, Delta Gold
Letting new accounts cool off since May
Really not sure what I'll add next or when



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