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

[burmans]

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?

This is more covered by Responsible Lending which essentially says you cant lend people more than they can afford. So in essence each lenders look at your salary, take off what they calculate as reasonable expenses (varies from lender to lender but is based on what you tell them adjusted by some figure they have on how much people really spend - this stops those who say they spend nothing). This leaves money available to pay loans.

In terms of this they have to take into account existing lending, the trouble here is they only know limits (from the Bureau) or what you tell them. Each lender has their own way they assess how much you owe, for a charge card hard to tell, its probably just a reasonable limit of what you could spend (and taking into account the limits aren't really limitless - Amex wants to get its money back too, and as a charge card you need to pay back every month).

 

[BillytheFIsh]

Thanks for the insight burmans.

 

[blueythecat]

For those that are interested, I promised to post back with the impact of my Platinum Charge application on my credit scores.

Quick recap (prior to application):
Veda Credit Score: 650
Experian Credit Score: 600
Credit Card applications in last 6 mths: 1
Credit Card applications in last 12 mths: 2
Credit Card applications in last 5 yrs: 9
Other credit applications 6 mths: 0
Other credit applications 12 mths: 0
Other credit applications 5 yrs: 0
Annual income (feel free to use a range eg $150k-$180k): $120k

My Platinum Charge application was approved instantly, card arrived within a week.

Credit scores post application:
Veda Credit Score: 636 (down 14)
Experian Credit Score: 557 (down 43)

I haven't applied for anything else in the meantime so the numbers above are entirely caused by the AMEX application.

I'm planning on applying for the Plat Edge within the next month, will be interesting to see how that goes!

Hope this helps some others, feel free to share your own experiences too!

 

[albyd]

Thanks for posting about your experience blueythecat. Looks more like I expected. As I'd posted earlier, my Veda score dropped 200 points right after my instantly approved Platinum Charge application and I had only had one other application (AMEX Velocity Platinum) in Feb this year.

 

[Comoman]

My Experian score went from 890 to 656 upon Amex Plat charge application. Pretty stupid really. My house is paid off, I have 7 digits $'s in various fixed term deposit accounts, never been late/defaulted on anything but my credit score drops!

Mine was also approved instantly. I pay my cards in full every month and converted from Velocity Amex (gone off VA).

 

[trippin_the_rift]

My Experian score went from 890 to 656 upon Amex Plat charge application. Pretty stupid really. My house is paid off, I have 7 digits $'s in various fixed term deposit accounts, never been late/defaulted on anything but my credit score drops!

Mine was also approved instantly. I pay my cards in full every month and converted from Velocity Amex (gone off VA).

I think you misunderstand how the credit score system works. It's not a score of your assets. It's your credit worthiness; that is - the likelihood you of you successfully servicing a debt. Taking out a mortgage actually increases your score over time and so it would be true that if you have your house paid off your score would drop.

It's a game... And to play it successfully you need to understand the rules.

Amex plat charge knocked me for 34 points.... Less than plat velocity took me for.

 

[Comoman]

I think you misunderstand how the credit score system works. It's not a score of your assets. It's your credit worthiness; that is - the likelihood you of you successfully servicing a debt. Taking out a mortgage actually increases your score over time and so it would be true that if you have your house paid off your score would drop.

It's a game... And to play it successfully you need to understand the rules.

Amex plat charge knocked me for 34 points.... Less than plat velocity took me for.

I don't dispute anything you're saying. My point is I have more than enough liquid assets (cash) to service basically any debt but my credit score got smashed. It appears the positive credit scoring is not working yet (certainly for Experian). I have no debt so my credit score is low (counter intuitive I would have thought).

 

[trippin_the_rift]

I don't dispute anything you're saying. My point is I have more than enough liquid assets (cash) to service basically any debt but my credit score got smashed. It appears the positive credit scoring is not working yet (certainly for Experian). I have no debt so my credit score is low (counter intuitive I would have thought).

Exactly.... you could service a debt, but you don't. Therefore your credit worthiness could be less than someone who has been consistently paying off a mortgage for the past 10 years.

 

[TomVexille]

I don't dispute anything you're saying. My point is I have more than enough liquid assets (cash) to service basically any debt but my credit score got smashed. It appears the positive credit scoring is not working yet (certainly for Experian). I have no debt so my credit score is low (counter intuitive I would have thought).

Exactly.... you could service a debt, but you don't. Therefore your credit worthiness could be less than someone who has been consistently paying off a mortgage for the past 10 years.

Exactly, which is why a credit agency is likely to be happy to have one as a client.

 

[trippin_the_rift]

Exactly, which is why a credit agency is likely to be happy to have one as a client.

If this were not the case - retirees with mountains of cash would be the best credit candidates.

It's not about being able to pay it all as much as its about being able to service the debt. In fact if you consistently pay minimum balances off your credit card your credit score will increase and the bank will offer you more credit. Pay off the full balance each month and you'll struggle to get credit increase offers.

Just like if you consistently purchase business class fares while maintaining airline status you will receive less upgrades than the flyer who always buys economy.

 

[TomVexille]

If this were not the case - retirees with mountains of cash would be the best credit candidates.

It's not about being able to pay it all as much as its about being able to service the debt. In fact if you consistently pay minimum balances off your credit card your credit score will increase and the bank will offer you more credit. Pay off the full balance each month and you'll struggle to get credit increase offers.

Just like if you consistently purchase business class fares while maintaining airline status you will receive less upgrades than the flyer who always buys economy.

I'm not saying that you're wrong. Just that credit agencies may sniff an opportunity to have a customer that pays interest.

I pay my entire balance every month and keep receiving credit increase offers. About every two months really. Got another offer today in fact.

 

[avante]

It's not about being able to pay it all as much as its about being able to service the debt.

Hmm... would you be able to perhaps define what you mean by "servicing a debt", because to me (and from the sounds of it, some others on this thread), it is a measure of how one is able to repay a debt, so to me, you're servicing a debt better by repaying more of it quicker.

In fact if you consistently pay minimum balances off your credit card your credit score will increase

Are you saying credit score increases as you carry debt over, or does it increase as a result of credit increase offers?

Just like if you consistently purchase business class fares while maintaining airline status you will receive less upgrades than the flyer who always buys economy.

[/QUOTE]
I'm sounding a little naive and ignorant here, but can you explain this as well? I was under the impression that airlines offer more upgrades to higher-tiered FFs.

 

[JohnK]

I'm sounding a little naive and ignorant here, but can you explain this as well? I was under the impression that airlines offer more upgrades to higher-tiered FFs.

Not if you are travelling business class all the time with status. Assuming there is no first class then you won't be receiving the same number of upgrades to business class as the person travelling economy all the time regardless of their status.

 

[blueythecat]

After successfully applying for the Plat Charge a couple of months ago, I decided to give the Platinum Edge a go this month. My credit score details prior to this application were as follows:

Quick recap (prior to application):
Veda Credit Score: 636
Experian Credit Score: 557
Credit Card applications in last 6 mths: 2
Credit Card applications in last 12 mths: 3
Credit Card applications in last 5 yrs: 10
Other credit applications 6 mths: 0
Other credit applications 12 mths: 0
Other credit applications 5 yrs: 0
Annual income (feel free to use a range eg $150k-$180k): $128k

My Edge application was instantly approved and the card sent out.

I'll post back next month and let you know what effect the second AMEX application in three months had on my scores.

 

[heddles]

After successfully applying for the Plat Charge a couple of months ago, I decided to give the Platinum Edge a go this month.

@blueythecat - couple of questions if I may please?

1. When you first applied online, did you have to supply proof of income (upload payslip or tax return)?

2. In reading the t&c's, it says you can't apply if you've held an Amex card in preceding 12 months. I have a CBA Platinum Amex / Mastercard combo. Would that rule me out do you think?

Thanks in advance.

 

[andye]

@blueythecat - couple of questions if I may please?

1. When you first applied online, did you have to supply proof of income (upload payslip or tax return)?

2. In reading the t&c's, it says you can't apply if you've held an Amex card in preceding 12 months. I have a CBA Platinum Amex / Mastercard combo. Would that rule me out do you think?

Thanks in advance.

1. I did when I applied some years ago

2. Bank-issued Amexes don't count. Some people have been successful in getting sign-up bonuses with previous Amex-issued cards (the Velocity Amex in particular) but this is a gamble

 

[avante]

1. I did when I applied some years ago

2. Bank-issued Amexes don't count. Some people have been successful in getting sign-up bonuses with previous Amex-issued cards (the Velocity Amex in particular) but this is a gamble

I signed up as an existing Plat Edge holder and received the 120,000 points

 

[quokka77]

Happy new year all. My score is up from 749 to 758 this month. No new credit enquires.

 

[robd]

Just checked my scores (just because) and there is a substantial difference between Veda @ 809 and Experian @ 597. Interesting.

 

[blueythecat]

@blueythecat - couple of questions if I may please?

1. When you first applied online, did you have to supply proof of income (upload payslip or tax return)?

2. In reading the t&c's, it says you can't apply if you've held an Amex card in preceding 12 months. I have a CBA Platinum Amex / Mastercard combo. Would that rule me out do you think?

Thanks in advance.

Sorry for the slow reply. In answer to your questions:

1. No they didn't ask this time - previously they have
2. As another poster said, bank issued AMEX cards don't count.