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Established Member
Posts: 90
Registered: ‎01-26-2013
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Why do banks decline people for credit cards that have bankruptcy?

My question is why does banks decline people for bankruptcy? I mean its like you cannot refile but every 8 or 10 years... When your like 4-5 years in they are protected from bankruptcy... Really theyt are missing out on a very profitable market... I'm so tired of being declined for bk I'm going to start a credit card blog website. I used to have a retail self defense products website so I know how to get it up in the search engines. I'm going to write about different things like this and start petitions and send them to the president and Financial bureau of financial protection.  If we all do our part maybe we can change somethings. I believe its credit descrimination in my book. Many people agree with me, I'm not speaking for the people who purposely run up cards and file for bk. I'm speaking for the working people who had a problem like I did my business went under. Chase understood me even after I stuck them with 27k. American Express is too hard too get. Those charge cards are pay in full they shouldn't be so hard to get... I have so many inquiries on my credit I just want a decent card not trash with 25% APR. Yeah I have a $4,000 limit Sears Platinum MC but 25.9% apr and no balance transfer offers at all and 4 capital one cards and 1 chase and several store cards. If I get approved for Citi Simplicity I will be happy their president's office is reconsidering my app from March. A very nice woman called me from their office.. I tried to have my amex app reconsidered before and I got a response back that not even a supervisor could overide their tough criteria. Discover won't approve me either even for they're smallest $500 minimum limit just due to BK but others get the card with BK not me though. They said they accept people with bk but they cannot tell me when their cut off time is and he said their criteria changes every day.. I said 4 years is the basic cut off time with Citi I got a Sears Card from them and I filed 30k bk on Citi business and a sears card and they still approved me but all my others cards are 1k lines about. I want to re-start my business and I have only a $750 limit cap 1.  I need a decent card for business but because of BK that is a no can do...My fico scores are decent but vantage score says I'm 815 good.  Credit scores don't matter in reconsideration. I cannot even get a $500 limit highest apr possible discover it card. That makes me feel like getting out of the credit card world people like me work so hard to rebuild their credit but get black listed by banks like Amex, Bofa and Discover.


Starting Score: TU:599 EXP: 596 EQ: 595 Starting Year 2009
Current Score: TU:715 (685 FAKO) EXP:647 (673 FAKO) EQX: 637 (FAKO 615) - All on 04/24/13 In the garden until 05/2014 because too many inq and low AAoA 1.4 mo. My BK chap 7 will be 4 yrs old July 2013
Goal Score: 760+ across the board by next year July 2014 5 yrs after BK


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Valued Contributor
Posts: 1,673
Registered: ‎11-11-2012
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Re: Why do banks decline people for credit cards that have bankruptcy?

[ Edited ]

It;s not great, but I think you partially answered the question yourself:

 

I'm not speaking for the people who purposely run up cards and file for bk.

 


How does the system distinguish (in a not very detailed app) between "bad" bk like that and "not my fault" bk on the other?   And most people, even those purposely running up their cards might have not intended to be bankrupt (e.g. using the funds to make a killing and pay it all back).

 

Scores etc are there for a lender to estimate risk of default.  And those who have had trouble in the past are statistically more likely to default again.  (And maybe with a finer classification we can do better at distinguishing those at greater risk from those that aren't, but maybe not, and it's too much work).  And yes, you can't file again for a period, but if you have no assets and owe the lender $30K, that you cannot file doesn't really help, at least in the short term.

Established Member
Posts: 90
Registered: ‎01-26-2013
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Re: Why do banks decline people for credit cards that have bankruptcy?

[ Edited ]

bs6054 wrote:

It;s not great, but I think you partially answered the question yourself:

 

I'm not speaking for the people who purposely run up cards and file for bk.

 


How does the system distinguish (in a not very detailed app) between "bad" bk like that and "not my fault" bk on the other?   And most people, even those purposely running up their cards might have not intended to be bankrupt (e.g. using the funds to make a killing and pay it all back).

 

Scores etc are there for a lender to estimate risk of default.  And those who have had trouble in the past are statistically more likely to default again.  (And maybe with a finer classification we can do better at distinguishing those at greater risk from those that aren't, but maybe not, and it's too much work).  And yes, you can't file again for a period, but if you have no assets and owe the lender $30K, that you cannot file doesn't really help, at least in the short term.

 

 

Nice credit garden you got. btw. I had cards like you before. My business went under and it was a sole proprietorship. So personal liability. I couldn't keep whom I wanted out like Chase and Capital One and Bank of America.  I wish they would put in a cut off time where they cannot use bankruptcy against you unless you filed on them in the past... I'm going to be gardening no more apps till next year I gotta let my inquiries age a bit and my credit as well. I thank banks like Chase who at least took a chance on me and gave me a $700 Slate card when I filed BK on them $27 they were stuck with. I get $44k a year and because of my credit I cannot get any decent business card only Capital One Spark Classic or real garbage card like former Cross Country Bank Applied Bank Business Visa card. Capital One has guidelines on credit levels like 5 year cut off for baddies.

 


Starting Score: TU:599 EXP: 596 EQ: 595 Starting Year 2009
Current Score: TU:715 (685 FAKO) EXP:647 (673 FAKO) EQX: 637 (FAKO 615) - All on 04/24/13 In the garden until 05/2014 because too many inq and low AAoA 1.4 mo. My BK chap 7 will be 4 yrs old July 2013
Goal Score: 760+ across the board by next year July 2014 5 yrs after BK


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Valued Contributor
Posts: 1,607
Registered: ‎09-15-2012
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Re: Why do banks decline people for credit cards that have bankruptcy?

To be honest, before you start a blog on financial literacy or whatnot, it would be my suggestion to brush up on a few terms.

There is no "Financial Bureau of Financial Protection". So anyone going to your website would lose faith in your advice pretty quickly. You lost me the minute you used that term as opposed to the real term Consumer Financial Protection Bureau.

I wish you luck in your post-BK endeavors. But I believe you are holding yourself back with all of your inquiries and that you need to just chill out with what you have for 12 months. I bet you will find that BK will hold you back much less with fewer inquiries.

In My Wallet: Amex BCP (12/12) $32,000, Chase Freedom (12/12) $16,500, Citi Forward (12/12) $14,600, Cap1 Quicksilver (6/12) $14,000, Barclaycard Rewards (5/13) $10,500, Citi Thank You Premier (6/15) $6,800

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Contributor
Posts: 178
Registered: ‎01-24-2013
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Re: Why do banks decline people for credit cards that have bankruptcy?


SnackTrader wrote:
To be honest, before you start a blog on financial literacy or whatnot, it would be my suggestion to brush up on a few terms.

There is no "Financial Bureau of Financial Protection". So anyone going to your website would lose faith in your advice pretty quickly. You lost me the minute you used that term as opposed to the real term Consumer Financial Protection Bureau.

I wish you luck in your post-BK endeavors. But I believe you are holding yourself back with all of your inquiries and that you need to just chill out with what you have for 12 months. I bet you will find that BK will hold you back much less with fewer inquiries.

+1!! This is how I got my Discover Card there was simply no INQ's when they pulled EQ... plus I gave a huge space when I got accounts approved such as  HSBC  Orchards, etc in 2008 I decided to garden for awhile..

EQ: 690 TU: 684 EXP: 687 UTIL at 33% still has not been updated to 5%
BK7 7.5 years old
Valued Contributor
Posts: 2,300
Registered: ‎01-22-2012
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Re: Why do banks decline people for credit cards that have bankruptcy?

[ Edited ]
Sounds like sour grapes to me. I would expect someone who runs a business to have a better understanding of financial risk. Perhaps this is part of why it went bankrupt.
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Re: Why do banks decline people for credit cards that have bankruptcy?


bs6054 wrote:

It;s not great, but I think you partially answered the question yourself:

 

I'm not speaking for the people who purposely run up cards and file for bk.

 


How does the system distinguish (in a not very detailed app) between "bad" bk like that and "not my fault" bk on the other?   And most people, even those purposely running up their cards might have not intended to be bankrupt (e.g. using the funds to make a killing and pay it all back).

 

Scores etc are there for a lender to estimate risk of default.  And those who have had trouble in the past are statistically more likely to default again.  (And maybe with a finer classification we can do better at distinguishing those at greater risk from those that aren't, but maybe not, and it's too much work).  And yes, you can't file again for a period, but if you have no assets and owe the lender $30K, that you cannot file doesn't really help, at least in the short term.


There is no "not my fault" BK. Whatever your past was that created the BK the individual filing was responsible for it. I personally don't believe in BK's. If you file it, you should be made to pay every penny of it back in payments.




Silver Spade Garden Club Member - Last App 12/16/13 - Looking for a clean slate NO INQ's / Diamond Inspired!
Starting Score:
EX (PLUS) 583 EQ FICO 565 TU FICO 590 3/15/2011 / Goal Scores: 720
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Valued Contributor
Posts: 2,300
Registered: ‎01-22-2012
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Re: Why do banks decline people for credit cards that have bankruptcy?

Since I can't quote on this, LS is spot-on. Lenders don't care why you went bankrupt. The only thing that matters is that they lent you money, they didn't get it all back, and therefore they're well within their rights to not want to lend to you again.
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Super Contributor
Posts: 7,132
Registered: ‎02-27-2013
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Re: Why do banks decline people for credit cards that have bankruptcy?

To OP: you are labelled as high risk for a valid reason. Lenders lent you money and you burned them in return. There's no discrimination going on. This argument isn't going to fly in any court or anywhere. There are already lenders willing to work with you. You can't and shouldnt complain at all. This country already has ones of the most relaxed laws with regards to bankruptcy.

Let your inquiries fall off, and slowly build up your credit history, like what others are doing. It's a tough process. its meant to be this way and there's no way around it.

Sometimes you can't have your cake and eat it too.
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Valued Contributor
Posts: 1,673
Registered: ‎11-11-2012
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Re: Why do banks decline people for credit cards that have bankruptcy?


CreditScholar wrote:
Since I can't quote on this, LS is spot-on. Lenders don't care why you went bankrupt. The only thing that matters is that they lent you money, they didn't get it all back, and therefore they're well within their rights to not want to lend to you again.

While I agree that lenders don't care why you went bankrupt, I think there ARE some (nearly) "not my fault" bankrupcies.  If you lost your job (which is hardly culpable in the recent recession) and then get hit for medical bills for treatment of something deemed a pre-existing condition (and thus not covered often pre Obamacare), that can easily wipe out any savings that the person had.   It's not clear what such a person should have done differently.   Without a 1/10th decent healthcare insurance/cost containment infrastructure, this is always a possibility.

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