CHASE - you make me maddddd!

[kdm31091]

I just meant that OP has a travel card already so CSP can wait. At least they get 2x on stuff with venture.

[CreditUnionFan]

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@Anonymous wrote:

So after a year and a half of re-building my credit, now with better scores than ever, and plenty of available credit that's PIF or almost PIF each month, and business and checking accounts with Chase with average daily balance of around $50k, I app'd for Chase Sapphire Preferred. Got a 7-10day. Called for recon today (888-245-0625) - DENIED.

Profile - Lost a business in 2011, house foreclosed - it's been a little over 2 years since the final settlement date. Also some student loans defaulted. Since then started a new business in 2012, is more successful than ever, student loans in rehab, ALL credit cards and various other accounts are in good standing and have been for about 18 months.

I asked the recon guy if he could see my Chase accounts. He said he could. I said, "Do you see how I've paid Amex $150k and Barclays $100k (mostly through my $12.5k Arrival Plus) in the last year? I'd like to put some spend on a CSP card, because I'm going to be entertaining more clients at dinners and I have some travel plans abroad for which I plan to take United." He basically said he didn't care - that old collection accounts mean more to him than a PERFECT credit card history with all the spend I have. He also cited too many inquiries. Ok, I'll give him that one. But I said, "yes I have inquiries. My income continues to grow and I continue to spend."

I've complained about Bank of America in the past for the same reasons, but they told me I needed to wait til Feb 2015 (now) for my foreclosure settlement date to be 2 years old or more (it is now finally).

In the last year, I paid off 2 car loans, obtained over $50k in available credit, maintain <6% utilization but heavily use the cards; clearly he can see how much I have in the bank and how much I pay to other credit card companies, yet old collections matter more (yes, they're being addressed and yes I know my profile will be all the better when they have been addressed).

Call again or just give up on this one??

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I'm perplexed because one section of the post talks about 18 months, and another portion says two years. Chase wants to see at least two years before they will begin not considering the previous late payments.

Surely you could recon the decision. It may come back to the same decision. You might be able to plead your case to a different analyst...  YMMV.

Others have commented that you might get the local branch banker involved, but if you've already reached out to the EO, there might not be anything for the loca banker to do.

I might suggest that as much as you might not like other lenders that you consider adding credit from other lenders to add additional evidence that the debt is manageable. The CapitalOne QuickSilver card comes to mind as a no-annual-fee card that many folks use for their day-to-day purchases. If you're a Sams Club member, the Sams MC offers 3% on dining and travel, and Synchrony may be more willing to extend credit initially.

Before you know it, lenders you've wanted will start to pursue you.

[Lyythine]

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@Anonymous wrote:

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@Lyythine wrote:

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@Anonymous wrote:

As a holder of bank stock (though not specifically with Chase) I am always heartened to see banks not just blindly throwing out large amounts of credit at people with past derogatory accounts and info. Ultimately it is the shareholders money that they are risking when they do that.

I mostly stick to the more heavily regulated Canadian side of things though, where things like PFD are not allowed to happen--thankfully! It gives underwriters a fighting chance at properly mitigating risk when the true and correct information is on a person's CR for the full amount of time that it should report, and as an investor I want them to have all of the info they can when deciding who to lend my money to!

G 

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That's not entirely correct, but I understand the sentiment.

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You're probably refering to the depositors--those whose actual money gets loaned out. However, this is true only in the most strict technical sense. Deposits are never really at risk because they are protected by the FDIC (at least theoretically), which is why deposit interest rates are so pathetic. Shareholders, on the other hand, actually own the bank, so if said bank fails, their money--my money--is gone. At best I may be able to offset some of the loss when filing taxes, but even this is not guaranteed to work.

G

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Your diatribe on the American banking system aside - my point was that there were multiple inaccuracies within your statement - but overall, I agreed with the sentiment.

Since you went further, my issues are as follows:

1) Any bank, in any country, is always taking a bet on loaning money. Its the way they stay in business.  To be considered well funded, US banks must keep 10% of a deposit on reserve, notwithstanding some technicalities that allow this number to be slightly lower.  So lets assume a $1000 loan.  Bank ABC gives Gorilla_88 a loan for $1000, it is then required to have $100 in reserves, which creates a $100 reserve liability + $100 in capital liability (to be well capitalized).  Thus, the $1000 loan that created the $1000 deposit to Bank ABC now created a $1000 asset + $1200 liability. Bank ABC now has to meet its new reserve and capital requirements.  It can either raise funds via shareholder equity, or by other means such as retained earnings. Most go the latter route and discount their deposit created by their own loan. So for example, they discount the $1000 deposit created by the loan and because of the discount, are now only required to have $190.  So where does the bank come up with the extra $90 if it doesnt have it?  It gets an overnight loan from the Fed market (which at >.5%, its not too bad of a deal). It keeps going down this road until they either attract other depositors to cover mins, raise equity via selling of shares or regain profits via loan interest.

2) As a shareholder, you do hold ownership rights, however, its not really your money they are using to lend.  They are using a percentage of deposits to determine loan caps. They raise equity via shareholders to allow for covering of regulatory minimums and capital requirements.

3) Any deposit over 250k is at risk.  Although a depositor with over 250k could potentially file a claim with the FDIC and assuming there are excess assets, perhaps get back some of their excess deposits.

4) The FDIC has nothing to do with deposit interest rates. Deposit interest rates are determined by the rate at which they can turn around and loan out your money for profit.  In this regard, our friend, the Federal Reserve has ruined savings rates by discounting the Federal Funds Rate and the Federal Discount Rate to almost nothing. Therefore, banks are lucky if they can get 4-5% interest on a loan and must then reduce the savings rate to the paltry sub 1% level to make a profit.  If the Fed finally decides to raise rates, you'll see deposit interest rates rise.

My point was, although I understood your sentiment, your statements were misleading.  Even in Canada, OSFI's requirement for leverage was 5% (as a result of the financial crisis), which doesnt seem like much, but much higher than the Basel standard of 3%, so ill give you that.  The FDIC recently put forth a proposal for a 6% leverage min on US institutions, however, I havent kept up with how that played out.  All in all, your bet on banks as an investment opportunity is just that, a bet. Even with a 5% leverage min in Canada. I get wanting the banks you invest in to make intelligent decisions, however, I was just noting that what you stated as fact wasnt necessarily fact.

[09Lexie]

So not to veer to far off topic, I have to agree with Chase's decision. A recent foreclosure and defaulted student loans are hard to overlook.  Good for you that you have begun your rebuild; however lenders do not share the same UW policies.  

Good of luck on your rebuild and try again with Chase in a few years. 

[Anonymous]

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@Lyythine wrote:

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@Anonymous wrote:

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@Lyythine wrote:

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@Anonymous wrote:

As a holder of bank stock (though not specifically with Chase) I am always heartened to see banks not just blindly throwing out large amounts of credit at people with past derogatory accounts and info. Ultimately it is the shareholders money that they are risking when they do that.

I mostly stick to the more heavily regulated Canadian side of things though, where things like PFD are not allowed to happen--thankfully! It gives underwriters a fighting chance at properly mitigating risk when the true and correct information is on a person's CR for the full amount of time that it should report, and as an investor I want them to have all of the info they can when deciding who to lend my money to!

G 

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That's not entirely correct, but I understand the sentiment.

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You're probably refering to the depositors--those whose actual money gets loaned out. However, this is true only in the most strict technical sense. Deposits are never really at risk because they are protected by the FDIC (at least theoretically), which is why deposit interest rates are so pathetic. Shareholders, on the other hand, actually own the bank, so if said bank fails, their money--my money--is gone. At best I may be able to offset some of the loss when filing taxes, but even this is not guaranteed to work.

G

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Your diatribe on the American banking system aside - my point was that there were multiple inaccuracies within your statement - but overall, I agreed with the sentiment.

Since you went further, my issues are as follows:

1) Any bank, in any country, is always taking a bet on loaning money. Its the way they stay in business.  To be considered well funded, US banks must keep 10% of a deposit on reserve, notwithstanding some technicalities that allow this number to be slightly lower.  So lets assume a $1000 loan.  Bank ABC gives Gorilla_88 a loan for $1000, it is then required to have $100 in reserves, which creates a $100 reserve liability + $100 in capital liability (to be well capitalized).  Thus, the $1000 loan that created the $1000 deposit to Bank ABC now created a $1000 asset + $1200 liability. Bank ABC now has to meet its new reserve and capital requirements.  It can either raise funds via shareholder equity, or by other means such as retained earnings. Most go the latter route and discount their deposit created by their own loan. So for example, they discount the $1000 deposit created by the loan and because of the discount, are now only required to have $190.  So where does the bank come up with the extra $90 if it doesnt have it?  It gets an overnight loan from the Fed market (which at >.5%, its not too bad of a deal). It keeps going down this road until they either attract other depositors to cover mins, raise equity via selling of shares or regain profits via loan interest. I said nothing whatsoever relating to this issue, and certainly didn't promote an opposite viewpoint to it. Please refrain from using red herring arguments to try and prove your point.

2) As a shareholder, you do hold ownership rights, however, its not really your money they are using to lend. Far from being the opposite of what I said, this is exactly what I pointed out when expanding on the original post--you even quoted me on it above! They are using a percentage of deposits to determine loan caps. They raise equity via shareholders to allow for covering of regulatory minimums and capital requirements. Another red herring--I didn't touch on the loan cap issue at all, so what exactly are you trying to refute in my post?.

3) Any deposit over 250k is at risk.  Although a depositor with over 250k could potentially file a claim with the FDIC and assuming there are excess assets, perhaps get back some of their excess deposits. Again, never touched on this topic, but if I had I would have used the CDIC rather than the FDIC as I am more familiar with CDIC limits (which are quite different from FDIC limits).

4) The FDIC has nothing to do with deposit interest rates. Deposit interest rates are determined by the rate at which they can turn around and loan out your money for profit.  In this regard, our friend, the Federal Reserve has ruined savings rates by discounting the Federal Funds Rate and the Federal Discount Rate to almost nothing. Therefore, banks are lucky if they can get 4-5% interest on a loan and must then reduce the savings rate to the paltry sub 1% level to make a profit.  If the Fed finally decides to raise rates, you'll see deposit interest rates rise. This is not at all what I was trying to say, though I can see why you might think so as I both phrased it very poorly and mistakenly omitted a vital comma which clearly affected the meaning that I was trying to convey--completely my fault!

Allow me to rephrase my entire point: "Ordinary bank deposits are never really placed at significant risk with respect to the depositor, which is one reason why deposit interest rates are so low--due to the strong correlation between risk and reward. Risk is also reduced on deposits (subject to limits) due to the protection of the FDIC. Bank deposits are a very different form of investment from stock ownership, wherein the shareholder is fully risk exposed, though both the shareholder and the ordinary depositor are stakeholders in the institution. As a shareholder, I am personally more concerned about how the banks mitigate their risk than I am as a bank depositor."

The idea I was conveying was simply that interest rates and risk are strongly correlated, and in what was meant to be a secondary point, that the FDIC covers a certain amount of lost deposits in the event of a bank failure anyway, so as a depositor I tend not to worry about my money. I didn't explain it very well in my second post, but I think it was fairly obvious what I was driving at from the original post. In any case, hopefully this clears it up. 

My point was, although I understood your sentiment, your statements were misleading. Even in Canada, OSFI's requirement for leverage was 5% (as a result of the financial crisis), which doesnt seem like much, but much higher than the Basel standard of 3%, so ill give you that.  The FDIC recently put forth a proposal for a 6% leverage min on US institutions, however, I havent kept up with how that played out.  All in all, your bet on banks as an investment opportunity is just that, a bet. Even with a 5% leverage min in Canada. I get wanting the banks you invest in to make intelligent decisions, however, I was just noting that what you stated as fact wasnt necessarily fact. What I stated as fact was and is fact, though admittedly in its most simplified form--though I made this simplification quite clear as well. Overwhelmingly what I did in my earlier two posts was to state an opinion in favour of sound risk management--very little fact even entered into it. In any case, this entire paragraph is simply a continuation of your earlier red herring arguments. I never once said anything in opposition to your statements regarding leverage requirements, OSFI, or any of the other arguments you have advanced. In fact, I don't even disagree with the vast majority of them--even after the fact!

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Having worked in various aspects of the banking industry for a number of years, I understand extremely well how deposit taking and bank lending works. What I fail to understand, however, is your insistence on putting an essay's worth of words in my mouth that I never even came close to saying. I have no idea what most of your above red herring arguments are even attempting to refute, or how you attribute the opposite point of view regarding any of those points to me! All I did was point out the risk/reward relationship (albeit poorly) between different types of bank investment (stock vs. deposit) and interest rates, and you invented the rest of my argument for me.

The viewpoint I was offering was merely that as an investor I like to see banks using sound judgements and all available information to mitigate their lending risk, because if the bank I own stock in fails, it's my shares that become worthless. I then attempted to point out how this differs from FDIC insured deposits which may well remain safe in the event of a bank failure, though a typo and poor phrasing obviously resulted in some confusion. My apologies for that.

In any case, it's a fool's errand to discuss, debate, or argue any topic with someone who--rather than listening to the other person's point of view and then responding to that point of view--instead chooses to infer, imply, and invent the first person's entire point of view for them out of nothing more than the clear blue sky and then proceeds to argue the opposite perspective of that non-existent point of view in exhaustive detail. As a result, I'm not about to waste any more time on it. 

G

[Anonymous]

I feel your pain...lol

I got denied for one old chargeoff...could not believe it...

I will say this they have good customer service reps that sound like they are in the US....but they are way tooooo serious hahaha...mod cut

Please refrain from using inappropriate language -Lexie, myFICO Moderator

[Anonymous]

Yeah I'm venting and just mad it's ok I'll get over it I have a back up plan if needed...hope I dibt get jinxed..

[sjt]

Was the collection account the analyst was referring to the foreclosure and student loans you mentioned or was something else? If so, where they paid or unpaid?

If the analyst was referring to the foreclosure and student loans, then I would have you Chase banker call on your behalf or subit a "special consideration" which is available to customers with $10K or more in balances.

Chase and other banks are becoming more relationship oriented but your current banking relationship may not be enough to override the collection accounts. I would not give up though.

[Imperfectfuture]

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@bigbang91 wrote:

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@Anonymous wrote:

So after a year and a half of re-building my credit, now with better scores than ever, and plenty of available credit that's PIF or almost PIF each month, and business and checking accounts with Chase with average daily balance of around $50k, I app'd for Chase Sapphire Preferred. Got a 7-10day. Called for recon today (888-245-0625) - DENIED.

Profile - Lost a business in 2011, house foreclosed - it's been a little over 2 years since the final settlement date. Also some student loans defaulted. Since then started a new business in 2012, is more successful than ever, student loans in rehab, ALL credit cards and various other accounts are in good standing and have been for about 18 months.

I asked the recon guy if he could see my Chase accounts. He said he could. I said, "Do you see how I've paid Amex $150k and Barclays $100k (mostly through my $12.5k Arrival Plus) in the last year? I'd like to put some spend on a CSP card, because I'm going to be entertaining more clients at dinners and I have some travel plans abroad for which I plan to take United." He basically said he didn't care - that old collection accounts mean more to him than a PERFECT credit card history with all the spend I have. He also cited too many inquiries. Ok, I'll give him that one. But I said, "yes I have inquiries. My income continues to grow and I continue to spend."

I've complained about Bank of America in the past for the same reasons, but they told me I needed to wait til Feb 2015 (now) for my foreclosure settlement date to be 2 years old or more (it is now finally).

In the last year, I paid off 2 car loans, obtained over $50k in available credit, maintain <6% utilization but heavily use the cards; clearly he can see how much I have in the bank and how much I pay to other credit card companies, yet old collections matter more (yes, they're being addressed and yes I know my profile will be all the better when they have been addressed).

Call again or just give up on this one??

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Call Chase EO. And as i advised many people, you should apply in branch, the banker can help you with a easier recon. They can connect you directly to a credit analyst and then confirm your banking relationship with chase. However, one thing particular seem weird to me, the Chase credit department cant possibly access your Chase checking account and saving. Thats what i was told last time i called for recon, and then i went in branch and everything resolved.try the EO route, they can see your banking relationship

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What if you just have prior credit relationship, not banking? Ni get better offers on money from my current CU, and my small business ventures don't provide enough money to warrant a business checking at this time.  Just wondering (a little under the weather today, so if this question is not apropos, apologies in advance).

[Imperfectfuture]

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@Strogen wrote:

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@Anonymous wrote:

So after a year and a half of re-building my credit, now with better scores than ever, and plenty of available credit that's PIF or almost PIF each month, and business and checking accounts with Chase with average daily balance of around $50k, I app'd for Chase Sapphire Preferred. Got a 7-10day. Called for recon today (888-245-0625) - DENIED.

Profile - Lost a business in 2011, house foreclosed - it's been a little over 2 years since the final settlement date. Also some student loans defaulted. Since then started a new business in 2012, is more successful than ever, student loans in rehab, ALL credit cards and various other accounts are in good standing and have been for about 18 months.

I asked the recon guy if he could see my Chase accounts. He said he could. I said, "Do you see how I've paid Amex $150k and Barclays $100k (mostly through my $12.5k Arrival Plus) in the last year? I'd like to put some spend on a CSP card, because I'm going to be entertaining more clients at dinners and I have some travel plans abroad for which I plan to take United." He basically said he didn't care - that old collection accounts mean more to him than a PERFECT credit card history with all the spend I have. He also cited too many inquiries. Ok, I'll give him that one. But I said, "yes I have inquiries. My income continues to grow and I continue to spend."

I've complained about Bank of America in the past for the same reasons, but they told me I needed to wait til Feb 2015 (now) for my foreclosure settlement date to be 2 years old or more (it is now finally).

In the last year, I paid off 2 car loans, obtained over $50k in available credit, maintain <6% utilization but heavily use the cards; clearly he can see how much I have in the bank and how much I pay to other credit card companies, yet old collections matter more (yes, they're being addressed and yes I know my profile will be all the better when they have been addressed).

Call again or just give up on this one??

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You had a foreclosure and defaulted on loans, not sure how you think you are entitled to any credit product at all. 

Some lenders are OK with your situation but you really cant hold it against Chase based on your relatively recent history. 

Looks like time will cure this and time alone. Good luck with the recons. 

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I do agree with this.  While I did work on wealth building, I still lived without credit for five years (hadn't reached this forum yet for rebuild).  More important to build than to worry about a particular card.  Small business stability is realized after 5 years, until then, you are still risky.  While I could get another Amex, just for my start up, I don't want any more card ATM, because I want some age building.

Just a note, some have found that after the initial denial with Chase, applying two or so months later ended up with an approval. (I do a lot or reading ). As always YMMV.  You might want to app for an Amex business card, and then after a year, app for a chase business card.

Another avenue, the rebuilding forum has a lot of info on how to get the baddies off your report.  Before any more apping, I would focus on that (I successfully removed collection accounts from 2016 through 2019 fall off dates).  If you focus in that, the world is yours once the reports are clean.