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Senior Contributor
txjohn
Posts: 4,214
Registered: ‎09-12-2008
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Credil Limit Reduction from a Credit Union?

[ Edited ]

I am curious to know if anyone has received a credit limit reduction from a Credit Union that is not related to a payment/credit issue?

 

We are seeing across the board CLD from the big banks, but from what I can see, the CU's appear to be business as usual for the most part.

 

Here is an article on the CLD trend:

http://www.smartmoney.com/spending/deals/Card-Issuers-will-not-Hesitate-to-Slash-Your-Credit-Line/

 

It is for this reason that I have the past two weeks diversified out to several CU's, as opposed to my history with BoA and Chase.  I felt that if things tighten, I don't want to have all my CL eggs in the proverbial CLD basket.

 

I cannot find any references to CU's having any issues, though a few posts have indicated that NFCU and others have tightened lending criteria, but have not reduced lending or limits.

 

I'm curious if anyone here has had one?

Message Edited by txjohn on 04-17-2009 12:21 PM

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09/03/2009 TU: 777, EQ: 776 ($8 balance on an account dropped me out of 780's)
03/28/2009 TU: 814, EQ: 810, EX: 781 (02/12/2009)
05/18/2005 TU: 563, EQ: 580, EX: 549
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creditchief
Posts: 181
Registered: ‎07-24-2007
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Re: Credil Limit Reduction from a Credit Union?

Hello txjohn, I just left my cu and the lo there told me buisness is booming. People are even taking money from their regular banks and coming in buying cds, and checking in to regular  cu chk acc. as opposed to reg. banks. and of course cc.

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Current Score: 745-tu 777-eq (ex-736 lo)
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txjohn
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Registered: ‎09-12-2008
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Re: Credil Limit Reduction from a Credit Union?

I am definitely planning to put money with those organizations that provide real value to me.  Where I have been "frozen" with the banks, the CU's have welcomed me with open arms and generous CL's.

 

Currently I have high regard for Alliant and PenFed, and am working on NFCU.  Alliant has great deposit rates, and all of those I mentioned have good to great cc/loan rates.

 

Credit Scoring 101 - Tuscani   *  Guide to Common Abbreviations
Frequently Requested Threads * FICO High Achievers  *  FICO Score Estimator


09/03/2009 TU: 777, EQ: 776 ($8 balance on an account dropped me out of 780's)
03/28/2009 TU: 814, EQ: 810, EX: 781 (02/12/2009)
05/18/2005 TU: 563, EQ: 580, EX: 549
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creditchief
Posts: 181
Registered: ‎07-24-2007
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Re: Credil Limit Reduction from a Credit Union?

I'm with you I learned so much from a very friendly lo today at my cu. I guess your just not a prison # with them and at least  the local cu know you by name!!

Starting Score: 550-tu 550-eq
Current Score: 745-tu 777-eq (ex-736 lo)
Goal Score: 800-tu 800-eq


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txjohn
Posts: 4,214
Registered: ‎09-12-2008
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Re: Credil Limit Reduction from a Credit Union?

Not just local.  I spoke with a LO at Alliant (Nick) who did the manual review for my Visa and Auto Loan app (online preapprovals got lost!)  anyway, called back a week later and got transferred to the loan dept...got Nick.  He remembered me, my name and picked up the conversation where we left off :smileyhappy:  (including conversational topics that would not be part of any notes in the system) :smileyhappy:  I was surprised.

Credit Scoring 101 - Tuscani   *  Guide to Common Abbreviations
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09/03/2009 TU: 777, EQ: 776 ($8 balance on an account dropped me out of 780's)
03/28/2009 TU: 814, EQ: 810, EX: 781 (02/12/2009)
05/18/2005 TU: 563, EQ: 580, EX: 549
Regular Contributor
creditchief
Posts: 181
Registered: ‎07-24-2007
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Re: Credil Limit Reduction from a Credit Union?

Take notes folks their the real deal!!!

Starting Score: 550-tu 550-eq
Current Score: 745-tu 777-eq (ex-736 lo)
Goal Score: 800-tu 800-eq


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hobojon
Posts: 261
Registered: ‎01-20-2009
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Re: Credil Limit Reduction from a Credit Union?

I haven't received any but there are reports on another forum of Penfed closing accounts due to high utilization and score drops.
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haulingthescoreup
Posts: 28,098
Registered: ‎04-01-2007
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Re: Credil Limit Reduction from a Credit Union?


txjohn wrote:

I am definitely planning to put money with those organizations that provide real value to me.  Where I have been "frozen" with the banks, the CU's have welcomed me with open arms and generous CL's.

 

Currently I have high regard for Alliant and PenFed, and am working on NFCU.  Alliant has great deposit rates, and all of those I mentioned have good to great cc/loan rates.

 



I do worry that as CU's get flooded with folks looking for safer havens that they, too, will have to start reining in CL's.

It's like finding a great restaurant, telling all your friends, they start going too, and next thing you know, you can't get a table! :smileytongue:
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Senior Contributor
smallfry
Posts: 4,831
Registered: ‎04-20-2007
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Re: Credil Limit Reduction from a Credit Union?


haulingthescoreup wrote:

txjohn wrote:

I am definitely planning to put money with those organizations that provide real value to me.  Where I have been "frozen" with the banks, the CU's have welcomed me with open arms and generous CL's.

 

Currently I have high regard for Alliant and PenFed, and am working on NFCU.  Alliant has great deposit rates, and all of those I mentioned have good to great cc/loan rates.

 



I do worry that as CU's get flooded with folks looking for safer havens that they, too, will have to start reining in CL's.

It's like finding a great restaurant, telling all your friends, they start going too, and next thing you know, you can't get a table! :smileytongue:

Like the old Yogi Berra joke. Nobody goes there anymore. It's too crowded.

Senior Contributor
txjohn
Posts: 4,214
Registered: ‎09-12-2008
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Re: Credil Limit Reduction from a Credit Union?

As long as CU's maintain credit standards, as opposed to the subprime mistakes made by the bigs, this should not be an issue.  In addition, the CU's do not have the profit requirments nor overhead that public banks have.  Banks are forever trying to figure out how to deliver increased value to shareholders....meaning increased stock prices and sustained dividends.  This means that they have expenses and expectations that CU's will never have.

 

It is this constant "need" to ever improve profits and return on shareholder value that pushes banks into "creative" lending....something that delivers short term gains with long term consequences.

 

CU's will never replace the subprime CCC's, because if you have crap credit, no/low income and abuse credit, the CU's won't lend to you.  But if you are healthy or on the rise, the CU's have the capacity to work with you in ways that many lenders cannot.

 

Also, this will help to correct the marketplace.  If there is a big enough pull of deposits and borrowing from prime or working on becoming prime, borrowers - then banks will eventually have to compete.  Kind of a supply and demand check and balance.  Its not instant and takes time for the trends to have effect, but in the long run there can be no other alternative.

 

Eventually the pendulum will swing and if you are credit worthy, you will go where credit it available on terms that are reasonable.  This will eventually begin to form a borrower segment type vacuum.

Credit Scoring 101 - Tuscani   *  Guide to Common Abbreviations
Frequently Requested Threads * FICO High Achievers  *  FICO Score Estimator


09/03/2009 TU: 777, EQ: 776 ($8 balance on an account dropped me out of 780's)
03/28/2009 TU: 814, EQ: 810, EX: 781 (02/12/2009)
05/18/2005 TU: 563, EQ: 580, EX: 549

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