Denied credit card application because of employment status?

[miFICOnewb]

I have a question that I think most of you might be able to answer here (hopefully). I was recently applying for a line of credit at a financial insituite where I had a checking account already opened with them. I always kept the checking balance relatively low, and had it for a very short period (I closed it after my experience with them). I applied for a new line of credit so that I can transfer a balance from an account where I have a very high APR. I wanted to transfer the balance to the new line of credit I was applying for with the hopes that I can get 0% APR promotional period or similar (they offered it to me in the past).

The loan officer appeared to be very optimistic in getting me started by submitting my application, and running my credit report. Everything was OK until we got to the employment verification part. I was able to provide her with my latest pay stub (last 30 days), but they were basically denying my proof of income because of the name of the company that writes my paychecks (XYZ Staffing LLC). I've been an employee of this Staffing LLC for 2 years now, and some people in my place of work have been staffed through similar agenceis for 5+ years.

I explained this to the loan officer, but they kept insisting that I request a letter from the company where I am performing my actual work duties which is different than the company that writes my checks. To make a long story short, I'm a sub contractor for a larg private company that works hand in hand with government agencies, so they have a large mixture of direct employees and sub-contactors. I've even spoken with some people who stated they've stayed as contractors their entire time of employment by choice.

After being denied my application, I went to another financial instituite that I bank with and requested a credit increase on a credit card I already had opened with them. They were able to submit my application, accept it, and provide me the extra line of credit that I needed to perform my balance transfer. They had no questions or concerns about my pay stub stating the word "Staffing" on it.

Anyway, it was very offending to me and I didn't understand why? I was so upset that I went to the original bank I tried with and closed my checking account with them. I told the loan officer that I have decided to end any current and future business with them. Can anyone provide their input please?

[guiness56]

I worked through a staffing company for about a year.  When my employment came into question, I used the staffing company as my employer and not the company I actually worked at.  It circumvented any issues.

[miFICOnewb]

I mentioned both to the first bank because I was trying to be personal with the loan officer. I told them who pays me, and where I actually work (both are in different states).

Their underwriter apparently didn't want to do it for that sole reason. Initially she told me that I was semi-approved, but only needed proof or verification of employent which led me to believe that they could have approved or written me for it if they wanted to. Her words of choice was that they cannot accept or verify employment if you're being employed through a staffing or employment agency. I thought thats what the work history, and paystubs were for? I think they were blowing smoke up my arse, and took a personal bias against me (at least thats how I felt).

[guiness56]

Could be some company policy, who knows.

The staffing agency could have given them proof for that matter beings they are the ones who send you to work and pay you. 

Her remarks make no sense.  You bring home a paycheck and who better to verify employment than the one who writes the check.  They don't give their money away.

Sounds to me like you made the right choice and took your business elsewhere.

[burghpa]

I have been in software consulting business for number of years, and consulted thru staffiing firm for number big companies. I always used staffing comapny as my employer, not the end client.

If you are getting paid from a staffing company (if you are on W2 Payroll) they are your real employer. The company you go to work everyday is merely a client of that staffing company. 

For instance, the HR (Human Resource) Dept in client company wont represent you ( thats why they don't have to give you any benefits like Medical , Dental, 401K etc) and only  HR dept of Staffing company can look into any HR issues.

[miFICOnewb]

Thanks guiness56 & burghpa

I did speak with my employer that pays me and they did tell me that they have no problem writing me a letter for future occurrences.

I noticed that when the 1st bank ran my credit report, my score was 650 according to them. It seemed  to have dropped about 5 points afterwards, and I knew this because the 2nd bank who approved my CLI told me my score was 645. Maybe this isn't a big deal, and it would have dropped 5 points regardless of how many lenders I tried to get an approval from? I hope that it didn't drop more points after the 2nd bank's inquiry.

Another thing I didn't like about the 1st bank either was the fact that the loan officer asked me questions regarding account balances in other accounts I have (e.g. savings). The 2nd bank didn't inquire about this at all! It's not like I was asking for a mortgage, just a $1,000 - 1,500 credit line.

I think I know what I need to do from here on out, and not mention the details about my job (even if I'm being personable). I thought it was really ignorant and naive of the loan officer, and their underwriter. Employment agencies are dime and dozens today, especially in the IT world. It's becoming increasingly common, and in a lot of cases is a norm for some people.

I'm just really glad that the 2nd bank gave me the CLI from $500 to $1,500. This worked out perfect for the balance transfer I needed to perform. I hope at the end of all this my score jumps up a bit from the 645 it recently dropped down to.

[burghpa]

Glad to hear it is all worked out for you and you got a CLI with second bank. I think some underwriters have stricter rules than others.

Regarding score drop,  5 point is nothing major, it will eventuallly recover.  I wouldn't worry too much about that. I think, if you have too many inquries within short time, it will impact your score a bit. These inquiries is going to stay in your report for 2 years, but after 1 year, they won't be considered while scoring.  So thats why most of us in this forum reccommend gardening.

Also, if you are carrying a balance on your CC etc, when you start paying off your balances, you will see a score jump. To boost your score, you should try to keep your overall balance below 9%.