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

[albyd]

I've had no recovery in my score since October when I applied for my platinum charge card & lost 200 points but in my latest report, can see Amex are reporting to Veda and I can see all my limits (that might have something to do with my score not recovering). Hoping as the rest start reporting, doesn't depress my score or I'll need to do some pruning.

 

[sydneymanaus]

applied recently and took a hit around 107 points. Dropped from high 850s to 740s.

 

[Jaian]

I just paid off all three cards yesterday after payday, checked my score this morning, and now it's higher than it's been before

(Applied for Amex)

[TD="bgcolor: #a4c2f4, align: center"]Date[/TD]
[TD="bgcolor: #a4c2f4, align: center"]Score[/TD]

[TD="align: center"]29/02/2016[/TD]
[TD="align: center"]700[/TD]

[TD="align: center"]09/03/2016[/TD]
[TD="align: center"]714[/TD]

[TD="align: center"]21/03/2016[/TD]
[TD="align: center"]714[/TD]

[TD="align: center"]23/03/2016[/TD]
[TD="align: center"]670[/TD]

[TD="align: center"]08/04/2016[/TD]
[TD="align: center"]670[/TD]

[TD="align: center"]22/04/2016[/TD]
[TD="align: center"]743[/TD]

 

[theblank]

I just paid off all three cards yesterday after payday, checked my score this morning, and now it's higher than it's been before

You have to pay Veda a subscription to get this score, you have all been conned into paying for something you dont need. The score is Bull****.

There is simply not enough data in the systems to evaluate anything and wont be until every single credit provider is uploading the account data every month, which includes balances and payment history. At the moment the only thing your score is based on is number of enquiries. That proves so very little.

The lenders are going to be doing their own credit checking and scoring on all the data you submit to them, as they have been doing for 25 years, they wont be making their decision based on a "score" calculated from such very little information. It doesnt even include financial data like what your current repayments are.

The credit checking companies have to give you their information for free. So to make some money they need to create a perceived need in the public's mind that they have something we want to pay for. Identity thefts and credit scores are a real issue but its not worth paying for unless you wear tin foil hats and believe what a salesman tells you.

 

[BillytheFIsh]

You have to pay Veda a subscription to get this score, you have all been conned into paying for something you dont need. The score is Bull****.

...

While I agree with you that the value of the Veda score itself is very limited, there's no need to be so hostile about it.

There is some value in having instant access to everything on your credit file with them and receiving alerts when enquiries are made. Whether someone chooses to pay for that is entirely up to them.

 

[DC3]

You have to pay Veda a subscription to get this score, you have all been conned into paying for something you dont need ....

A little harsh, I would say.

 

[Jaian]

You have to pay Veda a subscription to get this score, you have all been conned into paying for something you dont need. The score is Bull****.

Eh? I get the score for free...

 

[JohnK]

You have to pay Veda a subscription to get this score, you have all been conned into paying for something you dont need. The score is Bull****.

Agreed. Veda credit score means nothing. Not sure why people use it to influence their credit card applications.

I will say it again. I have more credit cards than I care to count. Carry a balance on everyone. If I add up the credit limits they would almost be the size of a small loan. Pay interest on everyone.

Yet credit card companies are begging me to take on more credit. 28 degrees called the other day. Sorry don't need anymore.

 

[ComeFlyWithMe]

While the credit score is of little use, regularly checking your credit file is good practice, and the alerts system they have invaluable, in this day and age of identity theft.

 

[Beta4Me]

Agreed. Veda credit score means nothing. Not sure why people use it to influence their credit card applications.

I will say it again. I have more credit cards than I care to count. Carry a balance on everyone. If I add up the credit limits they would almost be the size of a small loan. Pay interest on everyone.

Yet credit card companies are begging me to take on more credit. 28 degrees called the other day. Sorry don't need anymore.

When you apply for a card do you fully declare your limits and balances?

 

[burmans]

When you apply for a card do you fully declare your limits and balances?

I suspect JohnK will get somewhat of a shock when CCR finally does become operational!

 

[trippin_the_rift]

I suspect JohnK will get somewhat of a shock when CCR finally does become operational!

Carrying a balance and servicing the debt / slowly paying it down will be and is viewed more highly in terms of credit risk than someone who pays their entire balance off each month and has millions in charge-free assets.

Credit rating has almost no link to your income or assets. It's basically a score on how trustworthy you are with the credit, combined with how much$ you make for the lender.

This is why people that carry balances are offered more credit.

 

[JohnK]

When you apply for a card do you fully declare your limits and balances?

Yes I do.

I suspect JohnK will get somewhat of a shock when CCR finally does become operational!

Why? I am safer than some rookie who does not have a credit history but churns 4+ credit cards/year for signon bonus.

 

[burmans]

Carrying a balance and servicing the debt / slowly paying it down will be and is viewed more highly in terms of credit risk than someone who pays their entire balance off each month and has millions in charge-free assets.

Credit rating has almost no link to your income or assets. It's basically a score on how trustworthy you are with the credit, combined with how much$ you make for the lender.

This is why people that carry balances are offered more credit.

I think you are confusing credit risk with value as a customer. Yes, absolutely those who can't pay in full each month can offer more value to the banks but that doesn't make them a good credit risk. Conversely the best credit risk frequently does not make a great customer precisely because they can (and usually do) afford to pay back everything they borrow every month.

 

[burmans]

Yes I do.


Why? I am safer than some rookie who does not have a credit history but churns 4+ credit cards/year for signon bonus.

Clearly you don't understand CCR, someone who churns 4+ credit cards/year will have a credit history under CCR, in fact they would under the current model too.

What will become obvious under CCR is your payment history and the amount of debt you already have, in this respect you and that credit history rookie will in fact be evaluated exactly the same. The outcome may be different but you won't be able to hide the fact you have a considerable amount of debt you already have. And under Responsible Lending laws the lenders won't be able to gig ore it either, for both you and the rookie.

 

[calgarychris]

Carrying a balance and servicing the debt / slowly paying it down will be and is viewed more highly in terms of credit risk than someone who pays their entire balance off each month and has millions in charge-free assets.

Credit rating has almost no link to your income or assets. It's basically a score on how trustworthy you are with the credit, combined with how much$ you make for the lender.

This is why people that carry balances are offered more credit.

I worked as an analyst at one of the big banks managing their credit card forecasts. While I agree that credit rating isn't necessarily linked to assets or income, people are offered more credit because they're the ones who are most profitable for the banks. They've done sufficient analysis to show that if people are going to carry balances (and hence generate higher income for the bank), people are comfortable with having spent X% of available credit. If you therefore increase the credit limit, you'll generally see an increase in outstanding rollover debt. I suppose you're viewed more highly in the same way that casinos view habitual gamblers but I don't think that should be seen as a positive for the individual.

 

[albyd]

Thought I'd add a data point. I applied for Amex plat charge in October last year & my score dropped from by 200. Noticed all my Amex issued credit facilities and limits now show so I'm assuming the chunky limits had an impact.
Had a 10 point bounce in November and no score change or credit applications since. Picked up 31 points with April Veda update. Looks like addition on more credit data depresses score for longer after an application than in the past.

 

[blueythecat]

You have to pay Veda a subscription to get this score, you have all been conned into paying for something you dont need. The score is Bull****.

There is simply not enough data in the systems to evaluate anything and wont be until every single credit provider is uploading the account data every month, which includes balances and payment history. At the moment the only thing your score is based on is number of enquiries. That proves so very little.

The lenders are going to be doing their own credit checking and scoring on all the data you submit to them, as they have been doing for 25 years, they wont be making their decision based on a "score" calculated from such very little information. It doesnt even include financial data like what your current repayments are.

The credit checking companies have to give you their information for free. So to make some money they need to create a perceived need in the public's mind that they have something we want to pay for. Identity thefts and credit scores are a real issue but its not worth paying for unless you wear tin foil hats and believe what a salesman tells you.

So whilst I agree with a lot of what you are saying, if you are applying for a credit card with a lender you've never done business with before your credit file will certainly form part of that assessment. In this case it is also the only part you don't complete on the application form. Whilst I'm sure they don't use the credit scores provided by Veda, and the like, they will be taking the data on your file and making an assessment on it. Let's call that 'ranking' for lack of a better word.

This 'ranking' the credit provider calculates will vary with what is on your credit file and I would wager (no proof of course) that it will vary in the same direction as the Veda score does with fluctuations on your credit file. As such, I have concluded that whilst the actual 'score' value isn't important it's movements, especially with enough data points, could be used to help predict your success or not with a particular credit application. Assuming you take into account the other data you submit on the credit application form too.

 

[theblank]

So whilst I agree with a lot of what you are saying, if you are applying for a credit card with a lender you've never done business with before your credit file will certainly form part of that assessment.

It forms part of the assessment in all cases, whether you have been a customer or not. The information on the application is cross checked for consistency.

In this case it is also the only part you don't complete on the application form. Whilst I'm sure they don't use the credit scores provided by Veda, and the like, they will be taking the data on your file and making an assessment on it. Let's call that 'ranking' for lack of a better word.

They build their own assessment score based on all the data in the application, thinks like work industry and location also count. in fact everything on the application counts. Otherwise they wouldn't ask. I wouldn't be surprised now that the length of time the employer has been in business is also a factor as that can be very easily checked automatically, as well as how long phone numbers have been active.

The number of credit enquiries really only forms a very small part of the overall assessment. And that is all Veda have to build a credit score, so it is rubbish.
I dont know what scores I have but mine went from the 2nd best one to the 2nd worst one (using the free check thing), just because I refinanced my home loan. Every bank johnny worth his salt, would know that such an event doesn't degrade a persons credit risk in any way whatsoever.

This 'ranking' the credit provider calculates will vary with what is on your credit file and I would wager (no proof of course) that it will vary in the same direction as the Veda score does with fluctuations on your credit file.

I would be happy to wager that with you but neither of us could win. No credit assessing system is going to reveal any of this information,. they keep it highly confidential and for good reason. The people that work in assessing/checking applications also will have no idea what influence any factor can have, also for good reason. Anyone that says they know is a liar. Even the programmers don't know.

As such, I have concluded that whilst the actual 'score' value isn't important it's movements, especially with enough data points, could be used to help predict your success or not with a particular credit application. Assuming you take into account the other data you submit on the credit application form too.

Your success in the application is determined by the lenders assessment of your capacity to repay. Employment and residential stability are the next biggest factors.

 

[burmans]

The number of credit enquiries really only forms a very small part of the overall assessment. And that is all Veda have to build a credit score, so it is rubbish.

So here's the thing, you clearly know a fair bit about credit reporting from your posts, but then you go and make statements like this. Now I don't fundamentally disagree with your thesis that credit providers do have a fair bit more information to base their application on than just the score but in general they do a pull of your credit history so they don't think those factors are valueless. And to make the claim that all they base the scores is the number of credit enquiries is just ingenuous, even a quick browse of Veda's site https://www.veda.com.au/yourcreditandidentity/check/vedascore/how-my-vedascore-calculated would indicate quite a few factors. I know they keep it "confidential" because I too have worked in this space but its hardly a secret that one of these, i.e. defaults in the last couple of years, which is information that Veda has (and uses in building its score) and credit providers usually don't is highly predictive of future credit issues.

Use of hyperbole such as this is really not helpful for those who don't understand the industry quite as well.

Edit:sorry should have said disagree (not agree) above