How credit card lenders determine credit worthiness

credit cards

Credit card lenders try to predict the future, and base your credit worthiness on those predictions. Image: numberstumper/Flickr/CC BY-SA

Credit card lenders use a variety of predictors to determine your credit worthiness. We will look at some of them, and give some tips on what you can do to improve yours.

Red flags credit card lenders look for

The more obvious red flags that credit card companies look at when determining how good a risk you are include things like late payments, delinquencies, bankruptcies, outstanding debt balance, how long you have been using credit, how many lines of credit you have and the types of credit you have been extended in the past. The severity, timing, and frequency of each is evaluated by lenders before making you an offer.

Credit card companies are also gamblers, however, and would-be psychics. They are constantly trying to predict future events, and gamble upon those likelihoods. Depending on how high or low their precognitive algorithms rate you on various scores — which may or may not be accurate — plays greatly into determining how much you can borrow, if any, at what rate and under what terms.

Behavior score

Card lenders look at what you spend, but they also look at how you spend and where. Daily Finance quoted Adrian Nazari, CEO of, on the behavior rating. “If you normally shop at high-end stores and regularly pay off your card and suddenly start shopping at discount stores and carrying a balance, the lender could use this behavior data as an indicator that you have become higher risk and could take measures to minimize its exposure,” Nazari said. “Alternately, if your behavior indicates you are a good risk but you aren’t generating a profit, an issuer might determine how to incentivize spending.”

This score is based on long-term credit activity. To improve it, be responsible and consistent. Always avoid late payments and fees.

Bankruptcy score

This score predicts how likely you are to suffer bankruptcy down the road. To avoid it, use the old obvious. Pay your credit card bill on time and keep your debt balance down.

Revenue score

This score is a prediction of how profitable you may be down the road. If it is high, lenders may forgive other indicators that mark you as a higher risk. That could bring incentives to get you to spend more.

Collection score

This is a prediction of how likely you are going to be at keeping your debt down. Collection is expensive, and lenders like to minimize their risk.

To raise your collection score, Nazari advises, “Pay your bills on time, keep debt balances low, open accounts only when necessary to avoid excessive inquiries on your credit report.”

Attrition score

This is a prediction of how likely you are to jump ship and take a competitor’s credit card offer. Having a high attrition score is not a bad thing. If you are a good customer but your attrition score is high, you could be offered any number of appealing incentives.


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