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Did I just shoot myself in the foot with AmEx? - UPDATED

Established Contributor

Re: Did I just shoot myself in the foot with AmEx?


Phoenix-rising wrote:

I just got a letter in the mail from AmEx.  They sent a Form 4506-T request for transcript of tax return.

 

What's up with that?  The letter says that if they don't hear from me within 30 days, they will give no further consideration to my application.

 

O-kay?  So if I don't send it in, I wonder if my current CL will remain intact.  So far it hasn't changed.


Amex knows that you have been been revolving credit card debt for the past few years. If you have been paying down the debt consistently there shouldn't be any problem with adverse action being taken by Amex. 

 

If you haven't paid down much of your debt in the past year or so, there might be some adverse action taken by Amex if you don't send in the form.

 

When a person asks for credit limit increases instead of paying down debt to decrease utilization, that is called pyramiding debt. When a bank sees evidence of pyramiding debt it gets nervous. Amex might feel that you need to borrow more money because you are having financial difficulty.

 

Amex just wants to be sure that you can afford to pay back the debt you currently have before increasing your credit limit. You have stated in older posts that you took a 0% offer because it was too good to pass up. Did you save that money or spend it? If you still have that money, now might be the time to pay down some of your debt so that Amex is reassured that you are not in financial difficulty.

 

 If you have income that justifies your Amex credit limits, simply fill out the form and send it in. If your income does not justify the credit limits that you already have, definitely don't send in the form.

 

Amex may or may not reduce your current credit limits. The deed is already done so you cannot unring the CLI request bell. You can pay down as much debt as you can as fast as you can to get ready for your refi. You cannot rely on any CLIs to help you. The chances are that you might actually receive some CLDs between now and the refi.

 

You will have more success with the refi if you put aside all of the old strategies and plans for gaming the system. There is only one thing lenders are looking for now. They want to lend to people who are obviously not in financial difficulty. A high FICO score does not guarantee that a person is not in financial difficulty. Substantially paying debt down every month is the absolute best way to demonstrate to all that you are not in financial difficulty.

 

Hopefully Amex will not CLD you. It is not the end of the world if it does. Even if you do not receive  a  CLD there is no guarantee that you can refi with the terms that you want if you happen to have a high debt to income ratio. As others have suggested, seeking new credit of any kind is not the best move going forward.

 

Hopefully the Amex experience will work out for the best if it leads to you revising your game plan leading up to the refi.   

 

Message Edited by CreditAble on 03-27-2009 01:50 PM
Message 11 of 28
Frequent Contributor

Re: Did I just shoot myself in the foot with AmEx?


Phoenix-rising wrote:

I just got a letter in the mail from AmEx.  They sent a Form 4506-T request for transcript of tax return.

 

What's up with that?  The letter says that if they don't hear from me within 30 days, they will give no further consideration to my application.

 

O-kay?  So if I don't send it in, I wonder if my current CL will remain intact.  So far it hasn't changed.


 

Yes, this appears to be a FR or financial review, as stated by YoungEntrepreneur.  Good luck.

FICOs as of 09/2009 - TU 813, EQ 811, last known EX 797
FICOs as of 08/2009 - TU 791, EQ 809, last known EX 797
FICOs as of 07/2009 - TU 806, EQ 809, last known EX 797
Message 12 of 28
Senior Contributor

Re: Did I just shoot myself in the foot with AmEx?

sometimes only after do we realize that we have opened Pandora's box....Smiley Sad

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
Message 13 of 28
Established Contributor

Re: Did I just shoot myself in the foot with AmEx?


txjohn wrote:
sometimes only after do we realize that we have opened Pandora's box....Smiley Sad

 

Too bad Pandora's box doesn't have

a consumer warning label on it.

 

WARNING:

Opening this box can have unintended consequences

that will cause a lot of pain, suffering, and remorse.

 

Actually asking for advice in these forums

before taking an action usually will provide

ample warning of negative consequences.

 

Ask MyFICO Forums first !

Keep Pandora's box closed !  Smiley Very Happy


Message 14 of 28
Moderator Emerita

Re: Did I just shoot myself in the foot with AmEx?


Phoenix-rising wrote:

I just got a letter in the mail from AmEx.  They sent a Form 4506-T request for transcript of tax return.

 

What's up with that?  The letter says that if they don't hear from me within 30 days, they will give no further consideration to my application.

 

O-kay?  So if I don't send it in, I wonder if my current CL will remain intact.  So far it hasn't changed.



Ow. Smiley Sad

I wouldn't give a nickel for your current CL's chances of survival if you don't send in the form. I think that they interpret this (rightly or wrongly) as the cardholder not wanting them to know how much s/he really makes.
* 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
Message 15 of 28
Frequent Contributor

Re: Did I just shoot myself in the foot with AmEx?

Thank you all for your very wise, informed, enlightening and entertaining replies.  I love this place! Smiley Happy

 

After reading your replies I do think it's in my best interest to fill in the form and send it in.  I'll wait until after April 15 when we file our 2008 tax return.  Our income is significantly higher than our 2007 return.  Right now the cash we have set aside will be used to pay our 2008 tax return.  After we pay our tax return, we'll be in a position to pay off AmEx over the next 3 months.   Our debt is significant lower than it was a year ago.  DH & I both use CreditSecure, so I'm sure AmEx already knows most of the information it needs.  My util ratio has dropped from over 30% to around 20% or less.  The financial picture is definitely getting better for us.  We've worked hard this past year to pay down our debt.

 

I'll continue to update this thread as the story unfolds.

 

I really appreciate all your input.

DH's FICOS: July '08 TU-661 / EQ-593 / EX-656 --> April '09 TU-730 / EQ-705 / EX-685

MY FICOS: July '08 TU-735 / EQ-727 / EX-767 --> April '09 TU-789 / EQ-774 / EX-767
Message 16 of 28
Senior Contributor

Re: Did I just shoot myself in the foot with AmEx?

And have a Garage - Ebay - Craig's List sale to put some money toward balances Smiley Very Happy

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
Message 17 of 28
Frequent Contributor

Re: Did I just shoot myself in the foot with AmEx?


YoungEntrepeneur wrote:
Phoenix-rising, I believe they are conducting a financial review on your account. Check your account online and see if they suspended it or not. They did the same to me in January 2008. They said that if I didn't provide the necessary info within 30 days, they would close my account. I gave them the information and it took about a week for them to release my account.

 

I just looked online and it didn't seem to show anything about being suspended.  It shows an available balance of $13k and I just made a purchase with my AmEx card a couple of days ago.  I think I'm still OK so far.

 

Does a financial review involve more than just filling out the Form 4506-T or is that all I'll need to do?

 

I just looked at my past AmEx statements.  In Dec my statement balance was $12k.  It's down to $6.5k now.

DH's FICOS: July '08 TU-661 / EQ-593 / EX-656 --> April '09 TU-730 / EQ-705 / EX-685

MY FICOS: July '08 TU-735 / EQ-727 / EX-767 --> April '09 TU-789 / EQ-774 / EX-767
Message 18 of 28
Established Contributor

Re: Did I just shoot myself in the foot with AmEx?


Phoenix-rising wrote:

 

I just looked at my past AmEx statements.  In Dec my statement balance was $12k.  It's down to $6.5k now.


Congrats. Way to go. That's the kind of improvement that will ultimately lead to the best refi rate possible.

Message 19 of 28
Frequent Contributor

Re: Did I just shoot myself in the foot with AmEx?

GOOD NEWS!!!!!

 

I finally sent in the form 4506-T in mid-April.  Last week they actually gave me the requested CLI.  I've carried a balance on that card ever since October because of the 0% BT offer with the Blue Cash account.  I was so afraid they would CLD me, but I guess I'm lucky they didn't.

 

Also, our refi is under way and with any luck we'll close next week.

DH's FICOS: July '08 TU-661 / EQ-593 / EX-656 --> April '09 TU-730 / EQ-705 / EX-685

MY FICOS: July '08 TU-735 / EQ-727 / EX-767 --> April '09 TU-789 / EQ-774 / EX-767
Message 20 of 28