Veda Credit Scores and American Express Applications (esp Plat Charge)

[blueythecat]

The charge card is an interesting scenario as you're not applying for a set amount of credit... So they may be quite comfortable approving most people who meet the minimum eligibility as they can refuse charges over their initial comfort level until you've built a spending and payment history.

Previously your credit score and income would determine your first months spending limit. After that you would build your spending pattern to increase your limit in the background (for extraordinary purchases prepayment or asset proof is sometimes needed).

The point being for charge products I wouldn't expect your Veda score to have any bearing on approval (beyond not having any negative/derogatory entries). Just meet the income requirement and I'd expect you'll be approved.

Very interesting points - I guess I'd never thought about that, but I makes sense now you mention it.

 

[Ewing]

Mine was approved.

Edit: Wow. Don't know how I accidentally made a typo of 10 CC applications in 6 months. That should be zero

Veda Credit Score: 800
Experian Credit Score: No idea
Credit Card applications in last 6 mths: 0
Credit Card applications in last 12 mths: 0
Credit Card applications in last 5 yrs: 1
Other credit applications 6 mths: 0
Other credit applications 12 mths: 0
Other credit applications 5 yrs: 1
Annual income (feel free to use a range eg $150k-$180k): Higher than your example range.

The most I've spent in one month is $15k and didn't hear anything so my comfort limit is at least this.

The repayment/limit information appears on my report like this:

 

[JohnK]

My three applications, Charge, Reserve and Edge landed 3 separate hits on my Veda file. AMEX will check your Veda file, but what use they make of it, who knows?

This obsession with Veda is amazing.

You would be surprised what paying interest and keeping all your credit cards in good order does for your credit rating.

I am inundated weekly with offers of increasing credit limits, applying for new cards or upgrading existing credit cards.

 

[exceladdict]

This obsession with Veda is amazing.

You would be surprised what paying interest and keeping all your credit cards in good order does for your credit rating.

I am inundated weekly with offers of increasing credit limits, applying for new cards or upgrading existing credit cards.

I think that for folks unsure if they will be approved, and not wanting a rejection, the more info the better.

 

[blueythecat]

This obsession with Veda is amazing.

Perhaps, healthier than obsessions with poker machines and snake wrangling though.

I think that for folks unsure if they will be approved, and not wanting a rejection, the more info the better.

I agree - the more info the better.

 

[JohnK]

I think that for folks unsure if they will be approved, and not wanting a rejection, the more info the better.

Some people make it sound like Veda is the one deciding the credit card application.

Veda does not make the decisions nor does it mean that what is on your credit file is going to affect the decision.

 

[burmans]

Mine was approved.

Edit: Wow. Don't know how I accidentally made a typo of 10 CC applications in 6 months. That should be zero

Veda Credit Score: 800
Experian Credit Score: No idea
Credit Card applications in last 6 mths: 0
Credit Card applications in last 12 mths: 0
Credit Card applications in last 5 yrs: 1
Other credit applications 6 mths: 0
Other credit applications 12 mths: 0
Other credit applications 5 yrs: 1
Annual income (feel free to use a range eg $150k-$180k): Higher than your example range.

The most I've spent in one month is $15k and didn't hear anything so my comfort limit is at least this.

The repayment/limit information appears on my report like this:

Hey, that's really interesting. That there is a Comprehensive Credit Report that has been talked about for 19 months (since the Privacy Act changed) but this is the first real one Ive seen (Ive seen them dummied up). So Veda has finally got its act together. Good to know !

 

[exceladdict]

Some people make it sound like Veda is the one deciding the credit card application.

Veda does not make the decisions nor does it mean that what is on your credit file is going to affect the decision.

No, but, understanding what it means surely provides more, rather than less, indication of what the outcome of an application will be.

Of course there are dozens of other factors to take in to account, but to detail-oriented people, the better understanding of every factor, well, the better.

 

[get me outta here]

This shows an " account open date in Nov 2014", but it says no cc applications in past 5 years?

Mine was approved.

Edit: Wow. Don't know how I accidentally made a typo of 10 CC applications in 6 months. That should be zero

Veda Credit Score: 800
Experian Credit Score: No idea
Credit Card applications in last 6 mths: 0
Credit Card applications in last 12 mths: 0
Credit Card applications in last 5 yrs: 1
Other credit applications 6 mths: 0
Other credit applications 12 mths: 0
Other credit applications 5 yrs: 1
Annual income (feel free to use a range eg $150k-$180k): Higher than your example range.

The most I've spent in one month is $15k and didn't hear anything so my comfort limit is at least this.

The repayment/limit information appears on my report like this:

 

[albyd]

Just logged onto Veda. My only activity in the last month was platinum charge card application. Haven't had any other activity some feb (Amex velocity platinum card for small limit as wanted the points not credit) and my score has fallen 200 points. I can't see any comprehensive data. Anyone else taken such a big hit after Amex Platinum charge application? 120k MR points not worth 200 points to me. Usually been 40 points even for Diners app I made last year.

 

[Ewing]

This shows an " account open date in Nov 2014", but it says no cc applications in past 5 years?

Those were my metrics when I applied for the card.

Prior to that I'd had 1 CC application in 5 years - my EDR card which I took out in 2011.

 

[BillytheFIsh]

Just logged onto Veda. My only activity in the last month was platinum charge card application. Haven't had any other activity some feb (Amex velocity platinum card for small limit as wanted the points not credit) and my score has fallen 200 points. I can't see any comprehensive data. Anyone else taken such a big hit after Amex Platinum charge application? 120k MR points not worth 200 points to me. Usually been 40 points even for Diners app I made last year.

I wouldn't stress it too much. I certainly don't. If you play the CC bonus points game moderately hard, your score is always going to take a hit, but I would be surprised if financiers take the number too serious (or even look at it at all), rather than the underlying information on the report, as well as the financial information you provide to them in an application.

I don't work in the industry so of course I can only surmise and speculate, but personally, I'm not that worried about what my "score" is. It strikes me as much more of a consumer marketing tool. It's much easier to sell a "score" to people than a pdf document that just lists things they already know that they did.

Also, the score is only veda's algorithmic interpretation of the (currently very limited) information that appears on the report. Different financiers will interpret that data differently, along with your other financial information that of course Veda does not have (income, assets etc).

With 3 recent CC applications, as far as veda is concerned, I am absolute junk. But I have no doubt I would be approved for more if I pushed it, given my lack of defaults and other info. A rejection at some point seems inevitable, but again, I'm not that worried about that - despite what some people seem to think (at least until CCR is properly up and running) your file lists your applications, not whether they were approved or rejected.

Having said that, I will give it a break for the next 12 months or so though, because I don't want/need to push it any harder at the moment.

My VA Amex shows comprehensive data, which is interesting to see. My Citi card is listed as a "Credit Liability Information" after the Amex, but no comprehensive data (yet).

Once all the majors are putting comprehensive info on there, I think many of us who have been pushing it will need to reassess how we play the game because some of the things I have been doing would look terrible on my file, even though I pay off every card in full every month.

 

[burmans]

Just logged onto Veda. My only activity in the last month was platinum charge card application. Haven't had any other activity some feb (Amex velocity platinum card for small limit as wanted the points not credit) and my score has fallen 200 points. I can't see any comprehensive data. Anyone else taken such a big hit after Amex Platinum charge application? 120k MR points not worth 200 points to me. Usually been 40 points even for Diners app I made last year.

One of the problems with a charge card is the theoretical lack of limit and this may be the reason this has had such a big impact, but I don't know how Veda's scorecard works (even most of the people who work there don't!)..

You mention you can't see comprehensive data, this would be because not everyone is contributing. One of the things about CCR though is that when everyone does start contributing your repayment history will become much more important in assessing if you are a good risk (probably a positive to many people) and also lenders will have a somewhat better view of what other lending you have (maybe less positive for those who haven't fully disclosed).

My VA Amex shows comprehensive data, which is interesting to see. My Citi card is listed as a "Credit Liability Information" after the Amex, but no comprehensive data (yet).

Once all the majors are putting comprehensive info on there, I think many of us who have been pushing it will need to reassess how we play the game because some of the things I have been doing would look terrible on my file, even though I pay off every card in full every month.

Not necessarily, the main factor has always been whether you can pay, looking at applications is a poor proxy for how many cards you have and how much you can/have lent. Under CCR number of applications will become much less important in assessing (which is likely to be good for us who make many applications), repayment history across your loans will become much more important (depends on individuals but good if you are making repayments on time). This then leaves credit limits on your existing cards as the main factor.

This will probably be the one which could be most negative for those who like to get CC bonuses, the key would be
- keep limits down, i.e. if you only need to ask for 10K to get a card don't let them choose and give you 20K
- close cards you don't need

I will keenly be looking at my scores to see if I can impact them using these tactics. For those suggesting scores are not what lenders use, this is absolutely true in a non CCR environment because lenders have different/more information to the Bureau's (this is called information asymmetry). As we move to a CCR environment the overseas experience says that scores and application outcomes will start to align as lenders/bureaus will start to have much more similar information. Some lenders are already using scores as a factor (just one factor of many) but the overseas experience is that it will become more important, indeed in the US consumers walk into a bank and one of the first things lenders frequently ask for is their FICO score.

 

[trippin_the_rift]

This obsession with Veda is amazing.

You would be surprised what paying interest and keeping all your credit cards in good order does for your credit rating.

I am inundated weekly with offers of increasing credit limits, applying for new cards or upgrading existing credit cards.

You're 100% right!
I wrote this a while back it might be useful to some: https://medium.com/@drdoot/5-ways-t...-your-bank-with-your-credit-card-1a64cd1f2bb8

 

[burmans]

You're 100% right!
I wrote this a while back it might be useful to some: https://medium.com/@drdoot/5-ways-t...-your-bank-with-your-credit-card-1a64cd1f2bb8

Carry a balance on a credit card at 19% plus, not sure how many people would regard that as good advice!

 

[trippin_the_rift]

Carry a balance on a credit card at 19% plus, not sure how many people would regard that as good advice!

I carried a balance at 20% interest on a card many years ago. It was cheap money given my business was doubling revenues each month.
On the back of that I got offered more and more credit. Shows responsibility!

 

[JohnK]

Carry a balance on a credit card at 19% plus, not sure how many people would regard that as good advice!

Who said it is 19%?

Actively seek and cycle low rate balance transfers.

 

[BillytheFIsh]

Not necessarily, the main factor has always been whether you can pay, looking at applications is a poor proxy for how many cards you have and how much you can/have lent. Under CCR number of applications will become much less important in assessing (which is likely to be good for us who make many applications), repayment history across your loans will become much more important (depends on individuals but good if you are making repayments on time).

The main behaviour I had in mind was the serial acquisition and then dumping of cards after 6 - 11 months.

How bad will it look if you have 2 or 3 cards that have a full 2 years of positive repayment history, but next to that, say 3-5 cards that were churned within the last 2 years, but still with good repayment history? From what you're saying, perhaps not that bad at all.

This then leaves credit limits on your existing cards as the main factor.

This will probably be the one which could be most negative for those who like to get CC bonuses, the key would be
- keep limits down, i.e. if you only need to ask for 10K to get a card don't let them choose and give you 20K
- close cards you don't need

I've always been pretty vigilant about this and I have in the past decided to close some cards I otherwise wanted to keep because I didn't want my combined limit to get (too) out of control. It's not really much of an issue for me now, but a couple of years ago when the banks moved to Black/Diamond/Signature cards with $15K minimum credit limits each if you wanted the best earn rate, some choices had to be made. I suppose, like everything, the answer is to earn more money!

I imagine total combined limits vs annual income/available discretionary spend is something the banks have always looked at. Any idea how important such a factor is and how charge cards with no set limit might fit into the mix?

 

[albyd]

I'd be interested in this given I just applied for the Amex platinum charge and my score fell 200 points. Thankfully they've converted my velocity platinum to platinum reserve without another app. Had only one other application this year - I earn points from spend rather than sign on churn (tho sign on was a factor with this app). Applied for Diners last year and had hardly any impact on my score and it's a charge card too.

 

[burmans]

The main behaviour I had in mind was the serial acquisition and then dumping of cards after 6 - 11 months.

How bad will it look if you have 2 or 3 cards that have a full 2 years of positive repayment history, but next to that, say 3-5 cards that were churned within the last 2 years, but still with good repayment history? From what you're saying, perhaps not that bad at all.

There are two different issues at play here, are you a good credit risk and are you a good customer! While I don't want to speak for all credit providers in most lenders these are regarded as quite different roles and managed by different teams. Certainly the possibility is there that companies would identify and reject "churners" but in all companies I'm aware of the credit risk people don't consider this in their factors, this just doesn't form part of their job description.