topic Re: AOD FCU Denial Interesting Notes in Credit Card Applications

AOD FCU Denial Interesting Notes

Anonymous — Tue, 21 Jul 2020 19:13:05 GMT

So I applied for an auto loan and the Visa signature card. Spoke with a very nice gentleman over the last week or so and today finally got my denials. Just an FYI for future applicants, if you have significant student loan debt you will probably be denied.

They use the maximum payment when calculating those. In my case, I am on an income driven plan. The maximum payment for my loans is right at $1,000.00. My actual payment is $208 each month. Because my income driven has to be certified each year, they do not allow the use of that information and use the maximum payment possible. In my case, $1,000 is 20% of my monthly gross income by itself. I'm not sure if this is the norm but I've never encountered underwriting like that before. I just wanted to throw that out there for future applicants so they aren't caught off guard.

Re: AOD FCU Denial Interesting Notes

recoveringfrombk7 — Tue, 21 Jul 2020 19:41:18 GMT

That's ridiculous. Thanks for sharing though. I gathered from reading here that student loans were a problem and so I stayed away. I owe 177k federal, but with IDR I pay less than 500/month. I'm not even sure what my actual payment would be. Horrifying I'm sure haha.

Sorry about your denial, but again, thanks.

Re: AOD FCU Denial Interesting Notes

lhcole77 — Tue, 21 Jul 2020 20:07:40 GMT

@Anonymous This will be a really helpful post for people.

Thanks for sharing!

Re: AOD FCU Denial Interesting Notes

Anonymous — Tue, 21 Jul 2020 20:16:00 GMT

Thanks for the DP's! Sorry it didn't work out

Re: AOD FCU Denial Interesting Notes

ZackAttack — Tue, 21 Jul 2020 23:48:00 GMT

Glad I don't have student loans yet. Got to burn 2 529s and MET before applying for loans.

Re: AOD FCU Denial Interesting Notes

Anonymous — Wed, 22 Jul 2020 00:32:50 GMT

It's not ideal but I understand. I work for a bank that has some old school underwriting but they will at least recalc based on the IDR plan. I'm extremely heavy on the credit side with Sync and Navy. I have no complaints. Love them both. They've been extremely good to me. I was just looking to diversify my credit portfolio. I was actually expecting a denial based on my utilization (25ish %) or the one collection that falls off next year. I was going to still open a membership to establish a relationship. Once he told me my DTI was automatically going to be considered 20% out of the gate for the next 25 years it was pretty pointless for me to establish a relationship that I won't be able to use until I'm 55! Not going to knock AOD though. Rates are top notch. Good products. Excellent customer service. Just a little baffled by their underwriting.

Re: AOD FCU Denial Interesting Notes

RootDet — Wed, 22 Jul 2020 03:25:58 GMT

I am a similar experience with how they harp on student loans.

Re: AOD FCU Denial Interesting Notes

RootDet — Wed, 22 Jul 2020 13:21:34 GMT

I think you should complain to the CEO of discriminatory underwriting. Because under that principle that your SL could be $1k as your not longer eligible for IBR, well under that same situation, you also, In theory, could be making $200k/yr. If they are going to do assumption based lending criteria for facts not in evidence, then they should go all the way.

Not that you also have to tell us, but is a straight 10/30 year loan payment higher the arbitrary 20% income number they came up with?

Re: AOD FCU Denial Interesting Notes

Credit4Growth — Thu, 23 Jul 2020 04:52:41 GMT

👍@Anonymous and @RootDet

Thank you for sharing info & your thoughts! It is Very helpful to me!!

🤔 Please help out to understand the maximum payment when calculating for student loans so that I may have better view of the perception on DTI...

I sorry to hear about the denials.

Re: AOD FCU Denial Interesting Notes

recoveringfrombk7 — Fri, 24 Jul 2020 02:05:25 GMT

@Credit4Growth wrote:
👍@Anonymous and @RootDet

Thank you for sharing info & your thoughts! It is Very helpful to me!!

🤔 Please help out to understand the maximum payment when calculating for student loans so that I may have better view of the perception on DTI...

I sorry to hear about the denials.

@Credit4Growth

If you go to studentaid.gov you can actually login and see your federal student loans and the total monthly payment across all of the various plans available. OP is saying AOD are not using what is paid every month on an income-based plan, but instead what the payment would be under the Standard Plan, which is significantly higher in order to calculate DTI.

Re: AOD FCU Denial Interesting Notes

Credit4Growth — Fri, 24 Jul 2020 07:28:08 GMT

@recoveringfrombk7

Thank you!

I am on a standard plan, as indicated in the picture I am posting.

Based on AOD'S perspective, they will not use the $391 amount which is based on a Graduated plan but the $268 amount based upon a Standard plan?

That is specifically what I have been giving thought to.

Re: AOD FCU Denial Interesting Notes

recoveringfrombk7 — Fri, 24 Jul 2020 16:06:09 GMT

@Credit4Growth based on the DPs the OP provided they will use your monthly payment as long as you are not on a plan that requires yearly recertification, which is how the income based plans work.

Re: AOD FCU Denial Interesting Notes

Credit4Growth — Fri, 24 Jul 2020 17:12:41 GMT

Thank you, I do not know how I missed that understanding. This does help me.

Enjoy the weekend!

Re: AOD FCU Denial Interesting Notes

PullingMeSoftly — Sat, 25 Jul 2020 02:29:48 GMT

@Anonymous wrote:
So I applied for an auto loan and the Visa signature card. Spoke with a very nice gentleman over the last week or so and today finally got my denials. Just an FYI for future applicants, if you have significant student loan debt you will probably be denied.
They use the maximum payment when calculating those. In my case, I am on an income driven plan. The maximum payment for my loans is right at $1,000.00. My actual payment is $208 each month. Because my income driven has to be certified each year, they do not allow the use of that information and use the maximum payment possible. In my case, $1,000 is 20% of my monthly gross income by itself. I'm not sure if this is the norm but I've never encountered underwriting like that before. I just wanted to throw that out there for future applicants so they aren't caught off guard.

Thanks for noting this @Anonymous

I've added a brief statement about it in our "Known factors impacting approvals, limits, and APR's" section of the AOD approvals thread.

Re: AOD FCU Denial Interesting Notes

RootDet — Sat, 25 Jul 2020 03:55:29 GMT

@PullingMeSoftly wrote:

@Anonymous wrote:
So I applied for an auto loan and the Visa signature card. Spoke with a very nice gentleman over the last week or so and today finally got my denials. Just an FYI for future applicants, if you have significant student loan debt you will probably be denied.
They use the maximum payment when calculating those. In my case, I am on an income driven plan. The maximum payment for my loans is right at $1,000.00. My actual payment is $208 each month. Because my income driven has to be certified each year, they do not allow the use of that information and use the maximum payment possible. In my case, $1,000 is 20% of my monthly gross income by itself. I'm not sure if this is the norm but I've never encountered underwriting like that before. I just wanted to throw that out there for future applicants so they aren't caught off guard.
Thanks for noting this @Anonymous
I've added a brief statement about it in our "Known factors impacting approvals, limits, and APR's" section of the AOD approvals thread.

Based on my convos with them, if your total exposure is 2x of your income, I would expect a denial too. some may slip in, but within that is the new norm after the stampede. I think they certainly have now become officially a conservative lender.

Re: AOD FCU Denial Interesting Notes

coldfusion — Sat, 25 Jul 2020 16:49:44 GMT

@RootDet wrote:
@PullingMeSoftly wrote:

@Anonymous wrote:
So I applied for an auto loan and the Visa signature card. Spoke with a very nice gentleman over the last week or so and today finally got my denials. Just an FYI for future applicants, if you have significant student loan debt you will probably be denied.
They use the maximum payment when calculating those. In my case, I am on an income driven plan. The maximum payment for my loans is right at $1,000.00. My actual payment is $208 each month. Because my income driven has to be certified each year, they do not allow the use of that information and use the maximum payment possible. In my case, $1,000 is 20% of my monthly gross income by itself. I'm not sure if this is the norm but I've never encountered underwriting like that before. I just wanted to throw that out there for future applicants so they aren't caught off guard.
Thanks for noting this @Anonymous
I've added a brief statement about it in our "Known factors impacting approvals, limits, and APR's" section of the AOD approvals thread.
Based on my convos with them, if your total exposure is 2x of your income, I would expect a denial too. some may slip in, but within that is the new norm after the stampede. I think they certainly have now become officially a conservative lender.

Makes me glad I got in when I did.

Re: AOD FCU Denial Interesting Notes

Aim_High — Sun, 26 Jul 2020 16:54:07 GMT

@Anonymous wrote:
So I applied for an auto loan and the Visa signature card. Spoke with a very nice gentleman over the last week or so and today finally got my denials. Just an FYI for future applicants, if you have significant student loan debt you will probably be denied.

Sorry for your denials and that you got caught by that DTI issue, @Anonymous . I wish you had seen these reports earlier because this issue has already been documented.

In the original AOD FCU Visa thread (*see below), there were numerous reports of members reporting denials or documentation issues with AOD when there was:

(1) self-employment or unusual compensation

(2) High total DTI in general

(3) Student loan debt repayment calculations.

This just reiiterates that all of these are sensitive issues for them.

Original AOD thread:

https://ficoforums.myfico.com/t5/Credit-Cards/Juicy-new-3-CB-offering-from-local-CU/td-p/5971983

Re: AOD FCU Denial Interesting Notes

OmarGB9 — Sun, 26 Jul 2020 06:05:29 GMT

Sorry that happened OP. It sucks they calculate it that way, makes no sense and is very unfair.