03-01-2013 09:19 AM
A little history, I purchased a new home back in April of last year after joining MyFico. I was able to get my FICO credit score in the 700 range on average between all three bureaus. I knew my new mortgage would cause a hit on my FICO but figured it would go back to where it was. Currently, I am at a 690 with Equifax and a 667 with TU. I pulled recent reports from all 3 CRAs and initiated some disputes.
There are two very high balance cards where I am an AU. These were removed off Equifax but still remain on TU and EXP. They aren't mine, they are my mothers, I am not a secondary card holder and am just an authorized user. Equifax took them off when I bought the house and the underwriter wanted a LOE regardingthem because they showed up on the other two credit reports.
It is really effecting my debt to income ratio and I suspect that is really hurting my FICO scores. I initiated disputes for them a little while ago with the two CRAs.
In addition to those, I also have two collections accounts showing up between all 3 CRAs. They are old collections from 2006 and 2007(one faling off in September and the other October of 2014). I do not know what they are, or why they say I owe them money. I also had to do a LOE for these to get my mortgage approved. I disputed them back in January of 2012 with no luck and I just disputed them again a little while ago.
My problem is that I have two very high interest lines of credit with both Dell and Jareds. Bother are over 34% interest and its pretty annoying. Both are current, with no lates for over two years now. The Dell line is at 5000 of 5500 and the jareds line is at 2600 of 4000. The only credit cards I have are low balance cards which also have high interest rates (all above 20%) They are as follows:
Orchard Bank: 0 balance of 500 CL
First Premier Bank 0 balance of 1000 CL
Credit One Bank 0 balance of 700 CL
I want to get a high CL, low interest card but am worried I will be denied due to my crappy credit score. As I am pretty sure I already have some equity in the new house, I was contemplating getting a HELOC to pay off Jareds and Dell but am not sure if I would even be approved for that. My house was just purchased in April of 2012 for 207K. I currently owe 197K and the comparable houses on my street just sold for 227k & 234k each. I was lucky and got the house for a cheap price compared to the other homes in the area and its lucky for me that the market is starting to go up. I bought at the absolute bottom of the housing crisis IMO.
I currently have Jareds set up to get weekly payments of 65.00 a week to try and get it paid off and plan on moving on to Dell once Jareds is paid, but am convinced that If I can somehow manage to get a credit card with say a 10k limit and a substantially lower rate than I am currently paying, I could pay it off both Dell and Jareds and only have one payment, which I could pay off very quickly IMO.
I just don't understand why I cant seem to get higher credit limit cards. I have requested and been denied credit limit increases on all three of my cards and the ;ast new card I applied for was last year just after the closing on the house (was denied due to serious delinquet accounts). Does anyone have any ideas that could help me? The interest I am paying monthly on Dell and Jareds is killing me...its roughly 180.00 a month in interest alone.
Thanks for your help and sorry for the long read.
03-01-2013 09:37 AM - edited 03-01-2013 09:38 AM
When applying for CLI, I think you have better chances when you speak to a living, breathing person, face to face.
I find, if you just email the credit card company, they just plug your info into a computer and it does the rest as far as decisions go. I don't think their software takes into account a lot of things, like your income.
I know when I applied for a loan online at AlaskaUSA, we got approved for $5,000. When my wife and I showed up in person at our local branch to sign for the loan, the loan officer gave us another $2,500 on top of that. The computer software screening loan applications online, could not discern from my credit score alone, my wife's and I's capacity to pay back the loan.
I have seen a lot of people on this forum already who have credit card lines with credit limit's below $1,000, but make over $75,000/year.
And on the opposite spectrum, I have seen people on this forum with an income of less than $25,000/year, but have credit lines over $10,000.
A credit score's purpose I think is to reveal your willingness to pay. Not necessarilly your capacity to. If you speak to a human being, you might be able to persquade them to increase you credit limit based on your income alone, if your credit report is lacking in sufficient history.
03-01-2013 09:48 AM
Add me to your list of people making over 75K then. I make decent money at my job(84K) and my credit limits are aweful despite good payment history. I have had the Orchard Bank card since 2007 and never had a late payment. The Dell account has been mine since 2001. It is very frustrating. Thanks for the reply.
Should I try to call my credit cards today or should I wait for the disputes to be complete?
03-01-2013 09:51 AM
I closed these credit lines years ago, but back in the day, I was able to increase my credit limits with Capital One and Orchard Bank after they denied my request to increase my limit online.
After I received a message from both of them through their card's website account, I called customer service and told them I wanted to close my account. They immediately placed me on hold and connected me with a manager/supervisor. I was asked why I wanted to closed my account. I told them my credit limit was too low and my interest rate was too high. Next thing I know, I was offered a lower interest rate and an increase in credit limit, if I decided to keep my accounts open. Even though I was just denied by them via email the same day.
Sometimes you just have to play chicken with the credit card companies. I don't know if this will work in your case, because you have a high balance you just can't make magically disappear.
03-01-2013 10:00 AM
I did not notice it before, but you have no credit cards from a credit union. I think you will find credit unions are a different animal all together from a commercial bank.
I strongly believe that your best chances of getting a low interest, high limit, credit card is if you join a credit union and establish a strong relationship with that credit union by having a direct deposited account.
10 years ago, when I was clueless and naive. I applied for credit at all the big banks. Bank of America, Capital one, Chase, HSBC, etc... It took me forever to realize that those large banks did not care about me.
03-01-2013 10:17 AM
For one, the low limit cards that you have are known as "rebuilder" cards. They're not really meant to grow with you. They have high interest and fees and it's difficult to get a CLI. You will have to dump these cards at some point and move on to prime lenders. Orchard Bank was just taken over by Cap 1, so there may still be a future for that card.
Secondly, your Dell and Jared accounts have very high utilization. Most lenders won't consider you for a CLI when your UTL is very high.
Get those two cards paid down, app for a prime card such as Chase Freedom, and close your 2 low cards, keep OB for the time being.
03-01-2013 10:58 AM
I will do that. Thanks for the advice all. It just pains me to have to pay this high interest on both Dell and Jareds. The good news is that I was at 4k/4k with them a couple months ago but made a couple $500.00 payments in addition to the weekly payments that I just started, so I should have that down to 2k or so within a couple months. I can also exercize some stock options if I need to in order to pay Jareds completely off, then it will be on to the Dell charge for me. My goal is to lower my CC utilization to zero and maybe apply for some high limit cards then.
I just called Discover and applied for a Discover IT card, they said I would be approved but only for a CL of $1000.00 and an annual APR of 22%. I promptly declined that offer and decided to wait until these disputes are at least cleared and the 2 other credit cards that are not mine are removed.
03-01-2013 11:09 AM
You really need to join one of the credit unions, or USAA. You will get 5000+, witch is a start.
03-01-2013 11:13 AM
What area do you reside in?
Technically USAA is a bank, though they tend to act like a credit union.
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