My 360 on the problem with RECONS

[Fico2Go]

Everyone knows that I am a rookie and I have only been on the forum since last week.  During this time I keep hearing about RECONS RECONS RECONS.  There is even a backdoor to getting approved.  However I am not quite sold on the value of a recon. And heres why....

RECONS are typically recommended for applicants who are maginally approved at best.  Even if approved through the RECON back door the APR granted could be considerable higher than the instant approval.  For example if an applicant is denied due to "excessive" inquiries" as the sole reason I'm quiet certain a RECON could get an approval.  However the approval amount could be excessively low with sky high rates.  

My take is that RECONS are great for those looking for an approval..any approval.  But the downside to RECON approval is that one could be stuck with terms and rates that make it more difficult to get out of or change.  If a recon is the result of excessive inquiries a better alternative might be to let  the inquiries age or drop before persisting an approval.  The terms and rates could be better with a straight approval vs. recon.

What I am driving at is that at times it may  be better to forego a $1000 CL approval for a higher approval with better rates in a years time.  Of  course there's no guarantee that your scores will be the same next year as today's but the idea of RECON reminds me of my days as a loan officer with manual underwriting.  

Manual underwriting can result in approval but often at some cost in adjustments of rate and/or fees. 

Of course if the reasons for decline are due to other "hard to explain" reasons RECONs may be a solution since there's no alternative solution but to clarify. 

Just a thought. 

[elvigy]

I would differ. I had to recon with Chase twice to get approval on the Slate. I wanted this card to transfer a balance from an old (closed) Citi card that I was paying interest on. The balance at the time was $6400. I finally got Chase to approve on recon with a $10k limit and 15 months no interest, no balance transfer fee. I did get a horrendous interest rate after that but don't care. This card has one purpose and it is fullfilling that purpose for me.

So, in my case, recon was WELL worth the effort.

[rlx01]

If the card has a fixed APR and a minimum CL of 5K (CSP, etc) then a recon approval is no different to an instant approval.

And sometimes just getting in the door with a poor CL and APR allows you to build your internal risk score with an institution so that your next app is instant approved with good terms.

[compassion101]

I haven't even looked at any of my interest rates for a long time, except 0% intros

[drkaje]

I don't feel there's a pat answer. Ultimately: I believe it comes down to why people are denied credit and if a telephone conversation can mitigate some of what's reflected in their score/report.

[Creditaddict]

I think you are on the marginal extreme and then you have the opposite side of recon where the computer just did not like one thing and denied the app... like maybe INQ or recent apps but upon a human recon they approve for $15k+... my partner has had many of these and I think he has 90% of the time been given best terms

[Gunnar419]

Well, if you're not sold on recons, then the solution is simple: don't recon.

Others have found that they're sometimes helpful, both for getting approved and for getting higher CLs when you're just been approved. But YMMV.

Do you have any evidence to back your suspicion that recons lead to bad terms?

That said, yes, sometimes it is better to back off and garden. I don't think anybody would doubt that, but again it's YMMV.

[eagle2013]

Credit limits and APRs are not stagnant. They change and adapt through time and usage. The hardest part, particularly for those rebuilding is getting their foot in the door which is why they are willing to accept lower limits, especially from prime lenders.

Converse to your point, I always cringe a bit when I see 720+ scores "gardening" for cards. I think the idea of "gardening" for a card, particuarly when one has decent scores and a clean 2 year payment history is probably one of the worst things you can do in building a credit portfolio. Waiting six months or a year for a chance at "instant approval" for a card that you can have now (if you recon sucessfully) doesn't seem to make sense. If you have a lower limit ($1k) and in that year's time, you'll probably have at least two chances for CLI and APR reduction. You also have the history of demonstrated responsible use of the card that you otherwise woudn't have if you waited. Also, who is to say if someone waits that they won't be declined? Computer algorithms are just that - algorithms. They don't take into account the entire picture. In that case, you would STILL have to recon and waste a year of building a history with that card and lender.

In my particular case, I knew that if I applied for prime cards in my siggy that my likelihood of getting declined would be high. It didn't matter to me too much as these are the cards and lenders I wanted. With the exception of WF (which is a $400 secured card graduation), I have had to recon every other card I've received. It wasn't that hard. For me personally, I would much rather aim high and fight for a lower starting limit on a prime card that will grow over time and position me for similar cards rather than a decent starting limit on a subprime account. But this line of thinking takes guts and a healthy self-determination - which a lot of us have developed as a result of MyFico.

[Involver]

^ agreed wholeheartedly.

[Fico2Go]

You folks have sold me on RECONS.  ( I'm easy  )

So 4 for 4 for me since last week and now I am waiting for CHASE on a 7-10 day under review message. 
 After reading your comments I picked up the RECON line and reached a polite human being. 

I requested application status check and whether there's anything I could clarify to approve the application. 

After a couple minutes of waiting he returned to say that the application was denied ONLY because they need me to verify my identification.  

He provided a toll free fax # and said it would take the verification department 5-7 days to complete.  

OK.  fax sent and now waiting.  RECON I did. 

With the info faxed I also included a short letter to explain why I needed approval for $10,000 for BT. 

Hope to hear some good news soon.  Will keep everyone updated.