Is My Credit Rating Checked For a Credit Limit Increase Offer?

[skywalka]

Hi guys.

I got an offer from Virgin to increase my credit limit. Do they bother to check my credit rating before approval?

Thanx 4 looking.

 

[matthecat]

They would only be looking at their own internal systems - repayment history/arrears/average useage etc as it would breach the Privacy Act to do a credit check without your specific authorisation.

 

[Mal]

I have never had a credit check done at any time when requesting, or being given a credit limit upgrade for any of my cards.

You will normally be expressly asked something like "You give us permission to check your credit history" and have to sign that statement.

If you are worried, you could always request your Baycorp file a few weeks after the increase is approved.

(OR alternatively, subscribe to the MyCreditAlert service from Baycorp.

 

[JohnK]

If you are worried, you could always request your Baycorp file a few weeks after the increase is approved.

(OR alternatively, subscribe to the MyCreditAlert service from Baycorp.

I know we have discussed this in the past but I don't think Baycorp matters too much to anyone.

I accessed my Baycorp credit file back in July and posted the findings in another thread. My Baycorp file did not contain very much information to alert anyone inquiring if I had been increasing credit limits.

My CBA Visa and Mastercard have had 4 credit limit increases each in the last 2 years and none appeared on the Baycorp report. My AGC/GE credit line has had a credit limit increase in the last 2 years and it appeared on the Baycorp report. My Gold Amex had a credit limit increase which did not appear on the Baycorp report. I applied for a Citibank redycredit account and then a credit limit increase in the last 2 years and only 1 entry appeared on Baycorp report.

Let's not give Baycorp too much credibility. What is important to a financial institution is if proof of income and ability to meet repayments.

 

[Mal]

Baycorp is checked (mainly) when applying for new credit.

It's basically to check that you aren't a seriously bad risk that has already been identified.

Once you build up relationships with a credit provider, they tend to rely more on what they know about you and your habits with them rather than what BayCorp says.

Different situations, different requirements.

 

[skywalka]

My old Westpac Holden card had a few credit increases over the years which never appeared on Baycorp. Westpac manage the Virgin card so I doubt that they'd check.

 

[Soundguy]

Does anyone know the relationship between available credit limits on your CC and the amount you can borrow for a home loan? It seems they factor in the sum total of your CC limits and take this off what you can borrow, regardless of what is or isn't owing on your CC's.

Would it be feasible to temporarily lower the credit limit on your CC's when applying for a home loan?

 

[Evan]

When i looked at moving a property loan from one provider to another they said provided you can show us statements of your CC or its with that company and they can see you pay it off they wouldn't care what the actual limits were. (This was one of the big 4 banks)

So they didn't seem what worries my limits were, having said that my loan was for less than 65% the value of the property (just) and as such a lot of places treat that as what they call an unconditional loan in that the banks think they have enough equity in the property to secure the morgage regardless of anything else.
Also means almost no paperwork required to get loan.

Evan

 

[bambbbam2]

Baycorp is changing its name to 'Veda Advantage'

Baycorp collects a new name - Business - Business - smh.com.au

 

[codash1099]

Does anyone know the relationship between available credit limits on your CC and the amount you can borrow for a home loan? It seems they factor in the sum total of your CC limits and take this off what you can borrow, regardless of what is or isn't owing on your CC's.

Would it be feasible to temporarily lower the credit limit on your CC's when applying for a home loan?

In some cases, they don't even ask what other credit cards you have or what their limts are. Amex certainly didn't when offering me a Qantas Amex card.

The prime credit check through Baycorp or D&B would be to ensure that you have never defaulted or been sued. Diners once discovered a many year old dispute I had with a builder but weren't aware of the outcome.

 

[Evan]

The only dispute i have had is with Baycorp themselves ! Some entries that were not mine. And the other thing i hate is when you apply for credit it goes on the list, but there is never anything saying that its been paid off (eg car lease etc)

I have a very so-so credit history, no defaults or anything like that but a reasonable number of enquiry's.

Still i have my property loan no problems and have $30k potential credit on 2 cards (amex & visa), don't owe anything, no other loans and yet if i wanted a personal loan of something tomorrow i am sure i would be given the 3rd degree, i wish i knew what the banks seem to think about me or maybe i am just paranoid and i expect credit easier than they are willing to give, who knows.

Evan

 

[Dave Noble]

The only dispute i have had is with Baycorp themselves ! Some entries that were not mine. And the other thing i hate is when you apply for credit it goes on the list, but there is never anything saying that its been paid off (eg car lease etc)

I have a very so-so credit history, no defaults or anything like that but a reasonable number of enquiry's.

Still i have my property loan no problems and have $30k potential credit on 2 cards (amex & visa), don't owe anything, no other loans and yet if i wanted a personal loan of something tomorrow i am sure i would be given the 3rd degree, i wish i knew what the banks seem to think about me or maybe i am just paranoid and i expect credit easier than they are willing to give, who knows.

Evan

It's a good thing if banks start actually doing some proper checks that people can meet repayments; better than the approach I have seen of actually sending pre-approved applications to people

It is bad enough that BayCorp has the information that it does do wiithout suggesting that they be given more private information imo

Dave

 

[swissbignose]

It's a good thing if banks start actually doing some proper checks that people can meet repayments; better than the approach I have seen of actually sending pre-approved applications to people

A good thing for who? The banks or the debtor?

The real answer is that it's both. The banks might have less defaulters and their clients might be in less trouble.

The banks are making a killing with interest payments, late fees, overlimit fees. At this point, the banks are not suffering too much with defaulters. It's in their interest to encourage people to use their credit facility and if they overuse it, that's even better.

I'm sure each of the banks are carefully monitoring how much credit is going out the door, and to whom... just in case they need to dial it back a bit.

 

[Evan]

The big problem with credit and loans is that people just don't think about what they can really afford, a lot of people will do anything to get a house etc and not really saying thats a bad thing but i have seen some friends borrow way more than they probably should, thankfully they have got promotions etc and been better off but still i wonder why people do it.

People have to borrow within there means , the banks let them go outside it , its a fault of both parties.

And as far as i am concerned credit cards should be the kind of thing you pay off in full most of the time, sure its ok to spend and pay off over 3 or 4 months but you have to be aware of the interest, It hurts to hand the banks that much money !

And lets not get started on rolling all those credit cards into low interest loans and roll over to other cards, great idea if you manage it, but thats not then an invitaion to go and spend more on the cards you have just got all that extra credit on.

Having said all that i know most people here are just not in that situation.

Evan

 

[wombatcountry]

How is one's credit rating affected if one has applied for 3 different credit cards in the last 7 months (assuming all other credit history aspects are positive)? My husband would like to take advantage of the new 17.5K QF points offer for the Amex card, which is currently showing on the QF web site, but he's wondering if having applied for other credit recently might count against him. We currently don't have a home loan (nor have one planned), only credit cards, which we repay in full each month, and a spotless (if brief) credit history. Should he go for it?

 

[Dave Noble]

A good thing for who? The banks or the debtor?

The real answer is that it's both. The banks might have less defaulters and their clients might be in less trouble.

Well, yes. I was primarily thinking of the debtor rather than the bank since the loss of a write off of a 10-25k credit card debt if it happens is not going to dramtically affect the bank, especially if they manage to sell the debt off to a debt recovery company whilst the impact to the person accruing the debt could be quite significant

I have had in the past, pre-approved debt card applications sent to me where the debt card company cannot have done any checking since they would not have had the authority to access the records and I posit that many others must have done too. Some people can be very good at handling cards, but there are a lot of people who maintain a debt balance with , iirc from some news report, an avg of $2000. Giving out debt without checking that the person is able to repay seems extremely poor

Dave

 

[Evan]

I have had in the past, pre-approved debt card applications sent to me where the debt card company cannot have done any checking since they would not have had the authority to access the records and I posit that many others must have done too. Some people can be very good at handling cards, but there are a lot of people who maintain a debt balance with , iirc from some news report, an avg of $2000. Giving out debt without checking that the person is able to repay seems extremely poor

Dave

Credit card debt rose to $38.028 billion in November from $37.343 billion a month earlier, according to the latest figures from the Reserve Bank of Australia.
The average credit card balance rose to a record $2,868, up from $2,821 in October, CommSec said.

Dave, $2,868 , scary isn't it !, for all the people who have a zero balance that must mean a lot more have higher than avarage balances !

Evan

 

[NM]

Dave, $2,868 , scary isn't it !, for all the people who have a zero balance that must mean a lot more have higher than avarage balances !

Evan

It depends on just when they check the balance of the cards in the month. If checked on the right (or maybe wrong) day of the month, my cards will show a debt of more than that average. But if checked the day after pay day, they will show zero debt. My card balances are like a yoyo, sitting in the bank's favour for most of the month and then swinging back in my favour just before the statement due date.

 

[Evan]

Yep no way of really telling from the stats, I would assume somewhere they tell you how they calculate it. I am the same as you, and if i have been overseas hotels etc charged to my accound and got back from work make it look bad.

Still i will guess we on this board are the exception and not the rule.

Evan

 

[Dave Noble]

It depends on just when they check the balance of the cards in the month. If checked on the right (or maybe wrong) day of the month, my cards will show a debt of more than that average. But if checked the day after pay day, they will show zero debt. My card balances are like a yoyo, sitting in the bank's favour for most of the month and then swinging back in my favour just before the statement due date.

My understanding of the $2000+ figure is that it is the amount of debt balance remaining on the cards, excluding those debts paid off with no interest accrued.

From a smh article of 2005 ( In debt, and still in love with the high life - Paul Sheehan - www.smh.com.au )

Total credit card debt in Australia is about $30 billion, with the average card-holder paying interest on $2500 in debts each month. It is an expensive habit given the loan-shark interest rates that credit card operators are allowed to charge.

For those paying off the minimum amount from $2600 on an Australian card, it would take around 23 years to pay off

Dave