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     | Thursday, February 22, 2001 - 07:02 pm  Found a neat post tonight at: http://www.creditcardfreedom.com/reviews/cardholders/posted/all.asp?CreditCard=Capital+One+Platinum Essentially, the person is complaining that Capital One turned him down for a Platinum card because his credit was too good! The reasons? No balance on bankcard accounts; insufficient monthly payment obligations; sum of credit limits on revolving accounts; number of inquiries. A lot of CC companies screen for profitability, but I'm wondering if Cap One is taking things a little too far. The complainant claims he was after the low Platinum rate of 9.9 percent and instead was offered a Gold card at 18 percent. The denial explanations he got from Cap One don't exactly indicate the man is a spendthrift. The inquiry comment was fourth on the list, so maybe he's not even a shopthrift. He's clearly had access to the credit markets and impressed previous lenders. If that weren't the case, the comment about "sum of credit limits on revolving accounts" wouldn't have been generated as a denial reason. (BTW, the poster says he has more than a dozen positive tradelines and no negatives.) This appears to be a case in which a person was denied a competitive rate because a scoring algorithm decided he'd had too much access to credit and, possibly, did too good a job of paying back debts. It's really hard to figure: He's apparently either a good credit risk from whom the bank only can make money by charging higher interest or a poor risk whom must be assigned a higher rate because he could theoretically go out and siphon fists full of cash from his cards. Guess this sort of turns on its nose the old saw that the only time a bank will lend you money is when you don't need it. It also makes one think that you'd better lock in a low CC rate early. If you're too responsible, no one may want to do business with you.
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| | Thursday, February 22, 2001 - 11:17 pm not surprising when you let a machine do badly a job that intelligent people have been doing well for centuries--- along with all my other rationale, here's another example, and it speaks well for the people who have the idea imbedded in mind that FICO scoring is a fair and accurate method for determing who gets credit, who doesn't, and goes so far as to dictate terms and conditions, and tell consenting adults how to conduct business in what they claim is a free market. c'mon freddie & fannie--- you done been had by a pack-o-hacks, now just owe up to your mistake and take the whack-ware out of the credit industry. i have a new ouija board design that works better, and costs less than what UNfair isaac sucks in on every credit report now run in the USA today. these fine folks are buying up internet domains with names such as FAIRISAACSUCKS and LIQUIDSHIT, to name few of many that showed up in a websearch on FICO i did last night, and that's through just one of innumerable domain register companies. why might we think that UN fair isaac would bother to take time and trouble to secure so many of these addresses, putting them under individual names of officers and staff of this stinking little credit enterprise [add in extended families all over the country] if they really believed in FAIRness and accuracy of their system?? this thing was SOLD to the FED, and that doesn't happen unless somebody up in high places has had his or her thingie in a warm place at the perfect time in just the right of[ri]fice, no presidential indictments intended; going to buy a new pair of pants and a dress for my wife at bloomingdale's tomorrow to celebrate my parents' golden wedding anniversary cumming up in march, if i have time. maybe my credit is too good to refinance my house at 70% LTV, and messing it up alittle could save me as much as $600 a month in interest. according to UNfair isaac's website, any borrower who feels themselves a bit over-extended are encouraged to approach creditors with a proposal of settlement, with assurance that rebound to the point of being judged as a viable risk by their quackware will be quick and relatively painless. perhaps this is better than filing bankruptcy-- under the veil of secrecy that now controls virtually every form of credit approval (and denial), from big apartment buildings all the way down to a pair of sneakers bought at sears for $59, nobody knows. i bought a new car last fall-- FICO, not "the bank," told me what the interest rate would be if i wanted it. i complain about carrying real estate debt at rates between 8.5% and 11.5%, rather than the 7%+- most lenders offer in their weekly newspaper ads-- and i work for a real estate company. mistakes always seem to appear on credit reports, and in the past i have removed them so my loan applications could progress. this has never been a problem. consumer debt runs up when i renovate apartments- it comes cheap (sometimes even free), and when the work is finished, i repay it by refinancing the property. a lender might make this a condition of granting a loan request, and this has never been a problem either. over time, individuals and institutions involved in business form relationships, quite often of a personal as well as strictly professional nature. not only do acquaintances and friendships evolve this way; it is often through a profound sense of trust thus built that one person can help another in circumstance of immediate need or crisis, even to the point of averting ruin and disgrace. when this situation might ever arise, what lattitude does FICO allow to anyone?? far from suggesting charity or any "clarence got his wings" idealism, this is how many of the most successful business relationships are started and fostered over years or even generations throughout the world. when an underwriter feels confident that a borrower will perform on a loan under terms and assented to by both parties and executed in good faith, where is the place of some secret computer program to step in and prevent the agreement from consumating, or penalizing either party under any circumstances when each fully understands the standpoint of the other, all normally predictable risks and benefit have been presented and evaluated, and both enter into contract under their own free will? positive experiences by nature would incline one to repeat the event, and negative experiences discourage an aggrieved party from subjecting themselves to the ordeal again. it doesn't take Ph.D in syllogistic logic to figure this one out, but try explaining it to a computer. sit down with the machine, tell it all it should know, and rationalize with it. is the rate a bit too high?, how about mitigating circumstances?? negotiate?? who does the computer represent?? mine represent me, at least when it does what i tell it to-- if not, there's a bug in the software or perhaps windows crashed. even the richest man in the world isn't perfect, so that's why his company whose operating system makes most of the world's computers do what they do has put in an automatic correction feature that pops this obnoxious message up into my face telling me they found another problem with the software, time to fix it. not singing praises, but it sure beats a blank, and that's what UN fair isaac, backed by the FED, offers the real estate lending industry. credit reporting is a useful tool to help lenders decide how and to whom to extend credit. mistakes seem to leak in like so much bilge water, though when reviewed by an intelligent person, most can be corrected or explained, and when the potential borrower is handling their affairs irresponsilby, it usually becomes evident during an interview or at some other point in the application process. i earn my living renting apartments, mine and those of other property owners. it usually isn't hard to get a sense of something wrong when a marginal applicant comes along-- the long list of bad debt and late payments comes to mind long before i run a credit profile off the computer, and if a first impression turns out to be wrong, i keep my mouth quiet and recommend approval. nobody is perfect, though i can truthfully say that in the 11 years i've been renting apartments there have been less than 2% serious problem tenants, and we deny well under 5% of all applicants, even in cases where a computer generated credit profile is far from exemplary. divorce, student loan crap [most bad student credit is just that], sickness, accident, family tragedy, business failure--- etc. how do you tell a computer to understand these things?? not everyone is true to their word, and there are occasions where an application has to be denied. in my line of work, this usually happens due to: lies/falsified references application, surprise pets [said 1 cat, forgot to mention rottweilers], eviction history, criminal convictions, illegal immigrant status, drug addiction, factual income [$1600 unit on $1171 monthly welfare check], bad personal references [both best friends say that's a user and a cheat], deranged behavior during the viewing/application process; -- i've seen it all, and saying NO is NO happy occasion for anyone. let's go back to computer modeling. for each well qualified the ultimate quackware denies, it will probably let another in the above categories come flying across the finish line in olympic glory. a mortgage company representative with no training or experience whatsoever can issue a commitment in under 15 minutes using FICO based underwriting software- if the computer generates a magical 680 score, fannie mae or freddie mac certifies it as acceptable risk (golden) for sale on the nation's secondary markets, regardless of the borrower's equity, references, employment, background [if in US legally and not wanted by federal authorities] i have seen a young couple who required guarantor for an $875 apartment buy a $300,000 condo using FICO, and i don't deny that there are many people in this country who will derive benefit from it-- if so, that's great and i wish them all the best. credit scoring has been around for years, and as do actual credit profiles, both can be helpful in assisting lenders in making intelligent business decisions. the problem has arisen because people in power have decided to sacrifice humanity for convenience-- ["nobody wants to make decisions, so let's have machines do it from now on"]. this sounds nice, and so did communism when marx wrote the drafts for it. this works fine for ants-- did you ask your first date to share a fungus down in the dark mound? who bothered to read the bible or plato before lenin? you or i may have- russia and china were tortured and murdered their own people by the millions for religious faith, and i'm sure if plato even got into college lecture halls, his writings would have been subject to extensive modification and censure. things like this happen when those in control start dictating to other human beings that they should live like machines, and now perhaps versey-vicey. UNfair isaac-- earn back your chosen name. stick to squid migrations, and see if you can give the boston community an accurate weather forecast for the next 3 days. don't worry about how i'm going to be paying my mortgage for the next 30 years-- the FED-- scratch credit scoring. when somebody comes along with a computer model able to provide true assessments of actual risk in any discipline where human behavior and emotion are involved, go take a look at it. meanwhile, dispense with FICO scoring--- that and a ouija board will get you a good pick for tomorrow's lottery numbers. nobody will listen, so i'm sure i'll be up many a more night babbling this stream of thought into my keyboard and onto this forum. FICO scoring has cost me tens of thousands in interest and daisy chain refinancing, as perfect credit and strong equity in my properties don't seem to satisfy the computer's quackware that i'm an acceptable risk. courtesy FICO, i'm B/C, industry trash, without a single late payment on any credit account in over 10 years. the computer hasn't yet been instructed how to answer when i ask WHY??--  ** goodnight---  * FICO scoring still SUCKS!!
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| | Friday, February 23, 2001 - 10:17 am Capital One doesn't use FICO scores. They have their own proprietary model. While it's nice to see an "EZ Read" format of your credit profile at the beginning (like Experian provides) a fully encoded credit profile is much better if you have someone who will sit there and explain it to you. On an Experian report your entire payment history (up to 99 months) is encoded with various symbols from CN-123456789 for each month. C is the most positive indicating that the person had a payment to make and made that payment that month in a timely fashion. Any other mark is potentially negative. For example you might have a payment history of CCCC21CC-- This means you made your last four payments on time (C) that you were 60 days late (2) before that and 30 days late before that (1), current twice after that, had no payment due before that for two months (-). Probably the person's "positive tradelines" are for a credit card he got, charged on once, and left unused for months or years at a time. His payment history would look like this: ------------------C Look at it from the point of view of an automobile finance company. This person has no real record of being willing and able to make monthly payments in a timely manner. He hasn't *had* any monthly payments to make. The moral of the story is don't assume that just having an open, unused tradeline is a positive thing. It may very well be negative. Don't rush out and close unused tradelines either. That can adversely affect your credit to limit ratio. Another question is: If this person had credit cards open and unused why was he applying for a new credit card?
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