Called in to talk to them to get more detail on the denial. Told CSR my score was 710 today and she spoke with a loan officer. Even though the automatic reasons somewhat made sense she said the main reason was that I have double of the amount of credit to me available over the PenFed max they set for me!!! The magic number she gave me is no more then 16k total of credit. She stated I have over two times that amount. Something like 36k available to me. I think that is overestimate of what I really have but it probably isn't that far off. She said even if I reapplied when my 5 - year- old -paid -$115-medical- collection fell off my report and I had low utilization they would still reject me until I close out some cards. So basically in order for them to consider me for the 7k card I requested I would need to chop off 23k of credit limits. 
She herself suggested I don't bother with getting a credit card from them and that it probably isn't worth it.
Thoughts? Have you heard of this happening before? I have 15 cards. I'd probably have to close out 12 to get the 7k PenFed card. Seems kinda crazy and wouldn't that kill my fico score? What about the age of my accounts? Maybe if I kept my oldest card plus my Discover card it would be doable. Also, on the plus side less cards is easier to manage. If I closed all these cards out wouldn't that send up some red flags when I went for a car loan in a year or two? I guess there is a such thing as having too much credit and too many cards after all.. at least according to the PenFed folks. How did they come up with that 16k number too? Is it based on income?
Anyone know what that magic formula is? Are they looking at some sort of debt to income scenario if I were to max out my cards?
Thanks
@homerunstacy wrote:Called in to talk to them to get more detail on the denial. Told CSR my score was 710 today and she spoke with a loan officer. Even though the automatic reasons somewhat made sense she said the main reason was that I have double of the amount of credit to me available over the PenFed max they set for me!!! The magic number she gave me is no more then 16k total of credit. She stated I have over two times that amount. Something like 36k available to me. I think that is overestimate of what I really have but it probably isn't that far off. She said even if I reapplied when my 5 - year- old -paid -$115-medical- collection fell off my report and I had low utilization they would still reject me until I close out some cards. So basically in order for them to consider me for the 7k card I requested I would need to chop off 23k of credit limits.
Thoughts? Have you heard of this happening before? I have 15 cards. I'd probably have to close out 12 to get the 7k PenFed card. Seems kinda crazy and wouldn't that kill my fico score? What about the age of my accounts? Maybe if I kept my oldest card plus my Discover card it would be doable. Also, on the plus side less cards is easier to manage. If I closed all these cards out wouldn't that send up some red flags when I went for a car loan in a year or two? I guess there is a such thing as having too much credit and too many cards after all.. at least according to the PenFed folks. How did they come up with that 16k number too? Is it based on income?
Anyone know what that magic formula is? Are they looking at some sort of debt to income scenario if I were to max out my cards?
Thanks
Those reasons are bogus. You got a bad CSR, and a rude one at that, IMO. I know of people on another board making $40k per year and have a PenFed CC with a $45k limit and well over $100k in overall credit limits. There's something else about your credit profile they don't like/want/what not....or a combo of factors. It'll be up to you to figure out if it's worth...well...figuring it out, taking corrective action, and trying again down the road. And definitely DO NOT close any credit lines to please anyone, as HTSU said. They'd probably come up with another reason to deny you, since that's definitely NOT the real/only reason for this.
Sorry about the experience. They're usually so not that way.
I'd say it's the combo of the two collections, even though they're old, and that you currently have balances reporting on multiple cards. The balances part might be why they're saying "pyramiding debt", even though you're paying them off. (Good for you!)
If you want to try again one day, I'd definitely wait until you have something like a $20 balance on one card reporting. That will help your scores, too.
I think I've read that others have gotten PenFed with older collections, but assuming you're still interested in <2 years when they fall off, you'll be in a stronger position then. Also, your AAoA will have gone over 5 years, if you don't kill time getting a ton of other cards, lol.
I love the breakdown between wallet cards and SD cards --made my day! 
And boy, I wish I'd gone into healthcare IT. That's a great field, and I spend a fair amount of time waiting on the IT people to fix strange access problems for me when our goofy software goobers up again. (I'm in health information/ hospital coding.)
@haulingthescoreup wrote:I'd say it's the combo of the two collections, even though they're old, and that you currently have balances reporting on multiple cards. The balances part might be why they're saying "pyramiding debt", even though you're paying them off. (Good for you!)
If you want to try again one day, I'd definitely wait until you have something like a $20 balance on one card reporting. That will help your scores, too.
I think I've read that others have gotten PenFed with older collections, but assuming you're still interested in <2 years when they fall off, you'll be in a stronger position then. Also, your AAoA will have gone over 5 years, if you don't kill time getting a ton of other cards, lol.
I love the breakdown between wallet cards and SD cards --made my day!
And boy, I wish I'd gone into healthcare IT. That's a great field, and I spend a fair amount of time waiting on the IT people to fix strange access problems for me when our goofy software goobers up again. (I'm in health information/ hospital coding.)
Thanks for the feedback. I actually use to support our home coders and assorted abstracting products. Funny was just working on something for medical necessity checking implementation and playing with ICD9's, CPTs, HCPCS, etc. I never went to school for IT. Actually started out as a mental health counselor and was working on my masters in social work in the mid-90's.. Switched in the middle of my masters, dropped out, went into Healthcare IT to work for a major HCIS software company and then everything fell into place after that. It has been a great field. I am lucky that most of the time I love my job and my employer is very good to me.
Speaking of mental health - having so many cards is kind of driving me crazy even with them in the SD. Just more to manage in my excel file and have to worry about trying to rotate a balance to keep them active. At first I really loved playing the numbers game but I probably waste too much time doing it. I may trim down anyway. Maybe not go on a total closing spree but getting rid of a few that are really far in the back of the SD.