What’s Your Revenue Score?
It probably comes as no surprise that credit card companies evaluate your income when determining whether to risk offering you a line of credit, but did you know about the often un-heard of “revenue score?” Calculated by banks, this number weighs in their decision to give you credit. You might think a revenue score has to do with your income, but guess again. The revenue score actually has to do with how much money you are expected to make for the credit card issuer. Known only to the issuer it gives them insight into what you are bringing to the table.
Typically we never hear about this score because we are so focused on the FICO score. But the revenue and application scores play vital roles in the credit approval process. John Ulzheimer, a credit scoring expert and president of Ulzheimer Group LLC, says, “Revenue scores are commonly referred to as marketing scores. It helps [banks] make better decisions as to who they want to market to.”
Now, this doesn’t mean you should start racking up large amounts on your credit cards. You may think it’s a good idea have a little revolving balance to give your cards a chance to make some money but be careful not to fall into the debt trap, especially for a score you will never actually see!
Ted Connolly, a bankruptcy lawyer based in Boston and the author of The Road Out of Debt, cautions “I would hesitate from advising anyone to take steps to raise the revenue score.” There is no benefit for a consumer in raising their revenue score especially at the expense of their FICO score.
The best way to look at it is from this standpoint: a good FICO score benefits YOU and a good revenue score benefits ONLY the credit card company.