Credit Card Churning May Get More Difficult.

[kdser]

My credit savvy score has dropped 40 points because I closed my Citibank credit card.

What? serious?

 

[mviy]

Less credit can be a negative if you have little left.

Another possibility is something positive dropping off your file/or moving further away from the present.

Then there’s the CCR info that credit card companies may/may not have provided by now.

 

[theblank]

My credit savvy score has dropped 40 points because I closed my Citibank credit card.

you cant possibly know that was the cause.
1. they cant tell you because they dont know either
2. adjustments to algorithms can also cause fluctuations

you just need not lose sleep over it I am afraid, its a meaningless deviation, and its not going to affect you in anyway.

 

[kdser]

The drop of the credit score is directly related to the closure of the credit card.

I normally have one score each month, but in October I have two scores. The second (lower) score was generated at the same time when the credit card status changed from open to closed.

I am certainly not going to lose any sleep because of this, but I wonder whether the conventional wisdom in this forum that unused credit cards should be closed in order to improve credit rating is still valid.

 

[rock86]

I am certainly not going to lose any sleep because of this, but I wonder whether the conventional wisdom in this forum that unused credit cards should be closed in order to improve credit rating is still valid.

You don't close an account for the simple reason to improve your credit score. Now that CCR is here and coupled with the new changes starting 1 January, lenders can actually see your total limits (whether that is totally accurate yet is another story) and if you've got a card you are not using it still adds to your total credit available. Lenders will assess your application based on the total limit of all cards available (utilised or not), so the lower your total limit, the easier it will be to get approved (obviously still dependant on other criteria).

 

[Renato1]

Just got my Equifax report.
Amex, 28 Degree Mastercard and Jetstar don't show up.

Which might make churning not as difficult as I had at first thought - if I close another card down - which I'm not sure I want to do.
Regards,
Renato

 

[Spizz]

But it’s not just equifax that they reference.

 

[Dr Ralph]

But it’s not just equifax that they reference.

It varies.

 

[Renato1]

But it’s not just equifax that they reference.

Thanks. Any idea who else provides the info, so that I can get a report from them too?
Regards,
Renato

 

[Mr_Orange]

Thanks. Any idea who else provides the info, so that I can get a report from them too?
Regards,
Renato

There is also Experian (nee Veda) and illion (nee Dun & Bradstreet).

 

[andye]

Experian info from creditsavvy.com.au

Dunn & Bradstreet from creditsimple.com.au

Equifax/Veda from getcreditscore.com.au

 

[Renato1]

There is also Experian (nee Veda) and illion (nee Dun & Bradstreet).

Experian info from creditsavvy.com.au

Dunn & Bradstreet from creditsimple.com.au

Equifax/Veda from getcreditscore.com.au

Thanks very much to the both of you.

Credit Simple has the same card info as Equifax, while Creditsavvy is missing one card.
Renato

 

[Renato1]

28 Degree Mastercard just showed up on Credit Savvy.
This does now make things more difficult for churning. No way I'm going overseas with a tiny credit limit on that card.
Regards,
Renato

 

[deebens]

Interesting. I doubt anyone here will get caught with their pants down, but a few out there will probably run into some headwinds next year.

https://www.theage.com.au/money/bor...ristmas-shoppers-lending-20181129-p50j6h.html

 

[get me outta here]

Perhaps you can pre-load? I’d like to know the answer to that. But yes, it has too low a limit.

28 Degree Mastercard just showed up on Credit Savvy.
This does now make things more difficult for churning. No way I'm going overseas with a tiny credit limit on that card.
Regards,
Renato

 

[theblank]

Interesting. I doubt anyone here will get caught with their pants down, but a few out there will probably run into some headwinds next year.

https://www.theage.com.au/money/bor...ristmas-shoppers-lending-20181129-p50j6h.html

It likely wont be as bad as it seems, because the lenders still want to get your credit card business, they know that means you will be cancelling an existing card. Alll they have to do is comply with the legislation. If the assessor must include existing card limits + new card limit, hardly anyone would get a new credit card. Its no different to refinancing a PL or HL, the decision is made on the 'post loan' expenses.

The smart banks will provide a way for the applicant to declare the current credit card limits, and which ones they are 'refinancing', and those wont be included in the credit assessment. After that its still unlikely that the credit card provider will demand proof the previous limit is cancelled, that would be too costly an administrative overhead. Rather the onus will be on the cardholder to make good on the cancellation. If they dont and then run into debt problems, the cardholder wont be able to claim the credit card company was irresponsible in approving the limit.

 

[burmans]

It likely wont be as bad as it seems, because the lenders still want to get your credit card business, they know that means you will be cancelling an existing card. Alll they have to do is comply with the legislation. If the assessor must include existing card limits + new card limit, hardly anyone would get a new credit card. Its no different to refinancing a PL or HL, the decision is made on the 'post loan' expenses.

The smart banks will provide a way for the applicant to declare the current credit card limits, and which ones they are 'refinancing', and those wont be included in the credit assessment. After that its still unlikely that the credit card provider will demand proof the previous limit is cancelled, that would be too costly an administrative overhead. Rather the onus will be on the cardholder to make good on the cancellation. If they dont and then run into debt problems, the cardholder wont be able to claim the credit card company was irresponsible in approving the limit.

That's the traditional interpretation from the banks but as far as the legislation goes the responsibility for responsible lending falls on the credit provider. In my view it is likely that an outcome of the Royal Commission will be a stronger stance from the regulators and the government in regards to validating the lenders repayment capacity, I'm not sure the its "too costly an adminstrative burden" argument used in the past will be regarded as acceptable. There is already some evidence of this being applied to bank practices which are in place mainly for ease of administration.

 

[Lynda2475]

Does anyone know if holding a corporate credit card (where the employer has responsibility for paying the bills, but the employee has responsibility for using within expense policy) impacts your personal credit report?

My manager said she opted to not take out a corp card as didn't want to impact her credit history, but I was always of the understanding (since you dont apply for a limit ion a corporate card) it is outside your personal credit history.

 

[andye]

One of the only positive consequences of the Amex changes is that the best-earning cards shouldn't affect your limits on Comprehensive Reporting (or am I mistaken about the status of Charge cards)

 

[burmans]

One of the only positive consequences of the Amex changes is that the best-earning cards shouldn't affect your limits on Comprehensive Reporting (or am I mistaken about the status of Charge cards)

Charge cards need to be paid off each month and hence aren't regarded as a credit instrument, so you are correct.