Applying for credit cards with bad scores

[Anonymous]

I think I got lucky. About 7 months ago, a collection agency for Macys sent me an offer letter, setteling. The settlement was, you pay us $$$ and macy will re-instate your account with a $300 limit. I immediately jumped on board. I started using it and it has been helping.

Yesterday, I receieved a pre approval from CapOne. I was hesitant - I did not want to go online and apply just to get denied. It was a unsecured $39 a year with the first years 6 months 0 percent interest. I applied and was approved. I cant beleive it.

How does one get pre approved? I did not initiate it at all. if someone could shed some light on that, maybe you should try.

Also, Do other collection agencies offer what the Macys collection aganecy offered me? I wonder if it is possible to negotiate that.....

Thanks, Liz

[haulingthescoreup]

That might have been in-house collections on the Macy's card. Where did the collection status show on your reports --with the other accounts, or on the separate collections page?

As to how pre-approvals work, a shortened "soft" inquiry is done on your credit reports. As you aren't yet a customer, it won't give the lender all the info there, but we think that the lender specifies some criteria: wants an EQ report, FICO at least 600, no lates within one year, no collections or charge-offs within four years, no public records period, and then the credit bureau (EQ in this example) would crank out a list of all the records that meet that criteria. The lender would get the names and addresses associated with the records and start mailing letters.

And by the way, the criteria above are completely, absolutely made up. I hope no one thinks that that is some sort of common standard.

Anyway, the chances of actually being approved greatly depend on how tightly the search is done. That's why so many people are "pre-approved" and then shot down IRL --there's something on their reports that the soft didn't screen for, and when it shows up with the hard inq, ka-boom.

If you pull your full credit reports, directly from the bureaus, you'll see a list of soft inquiries after the hard ones. Those from existing lenders who are checking up on you or considering a CLI (or CLD) will have -AR or -AM prefixes. (account review; account maintenance) Those that are for pre-approvals will have -PR (promotional.) The -AR and -AM softs can look at your entire record, as you are already a customer, but the -PR's just get your demographics.

It's always entertaining to see who's sniffing around. And I've noticed that softs are falling off all three reports, both older and recent, so I check once a month and add any new ones to a running list I have.


eta: sorry, my bad: the EQ full report shows the soft inquiry prefixes. EX does not. TU displays them in two sections, one for promos and one for account maintenance.

Message Edited by haulingthescoreup on 03-01-2009 06:02 AM