topic Re: Do Banking Relationships Still Matter? in General Credit Topics

Do Banking Relationships Still Matter?

adelphi_sky — Fri, 30 Jun 2017 14:33:01 GMT

In this age of automation, I think there is the lost benefit of a personal banking relationship between customer and bank. Your credit is now just a number calculated by machines. Your credit applications are run through algorithms that look at numbers instead of other important factors that take into account your ability to pay. FOr example, education level is not taken into account. Yet, studies have shown that employment is higher among those with secondary degrees. Which means there will be less disruption to income streams.

I feel that if your relationship with a bank has been great such as no late payments and everything is paid off on time, then your rate shouldn't depend solely on your credit rating. Especially if you have clean credit with no late payments and your utilization is not high. Then why do banks rely so heavily on your credit report instead of the long history where you paid your debts to that bank on time and in full? SHouldn't you be able to get a lower rate than what the computers gave you?

Have any of you receive a reconsideration for lower rates when applying for loans from banks where you have a good credit history? For example, I have been a customer of BMW Financial Services for over 12 years. Paid on time and purchased a number of cars. So, shouldn't I be able to get the lowest rate possible even if my credit my tell the computer to charge me 3 points higher? I'm not looking to buy another BMW. THat's just an example. I just want to know if anyone belongs to a bank that takes into account your relationship with that bank as much as what your credit rating says about you.

Re: Do Banking Relationships Still Matter?

SouthJamaica — Fri, 30 Jun 2017 15:49:30 GMT

@adelphi_sky wrote:
In this age of automation, I think there is the lost benefit of a personal banking relationship between customer and bank. Your credit is now just a number calculated by machines. Your credit applications are run through algorithms that look at numbers instead of other important factors that take into account your ability to pay. FOr example, education level is not taken into account. Yet, studies have shown that employment is higher among those with secondary degrees. Which means there will be less disruption to income streams.

I feel that if your relationship with a bank has been great such as no late payments and everything is paid off on time, then your rate shouldn't depend solely on your credit rating. Especially if you have clean credit with no late payments and your utilization is not high. Then why do banks rely so heavily on your credit report instead of the long history where you paid your debts to that bank on time and in full? SHouldn't you be able to get a lower rate than what the computers gave you?

Have any of you receive a reconsideration for lower rates when applying for loans from banks where you have a good credit history? For example, I have been a customer of BMW Financial Services for over 12 years. Paid on time and purchased a number of cars. So, shouldn't I be able to get the lowest rate possible even if my credit my tell the computer to charge me 3 points higher? I'm not looking to buy another BMW. THat's just an example. I just want to know if anyone belongs to a bank that takes into account your relationship with that bank as much as what your credit rating says about you.

IMHO the answer to your question is "no". Banks don't have "relationships".

They like to say they do, but the minute it suits they're interest they'll cut you off at the knees. And instead of saying "sorry" will say "it's in the fine print".

Re: Do Banking Relationships Still Matter?

RobertEG — Fri, 30 Jun 2017 18:16:35 GMT

With the convenience of electronic banking comes the disadvantage of lack of personal relationships.

As an alternative, many consumers maintain accounts with a local credit union.

Most still have the old-time personal relationship established by walking in the door an speaking with a real rep, and some consider the fact that you technically have a share in their business as being more than lip service.

Re: Do Banking Relationships Still Matter?

Anonymous — Fri, 30 Jun 2017 22:11:58 GMT

This topic has been debated quite a bit in the past and when all the dust settles by the end of one of these threads, typically you have opinions on both sides. Some feel that relationships don't exist or matter, where others will swear they do to some degree.

I sort of land somewhere in the middle I suppose. I agree with most of what SJ said, that regardless of any "relationship" a bank won't hesitate to cut you off for any reason that they or their computer system deems worthwhile.

Where a "relationship" may be a positive thing could be during the application process. This could be an application for a credit card, loan, or other product. If you have a previous favorable relationship with that bank and the product you apply for involves a manual review, that relationship (assuming it's positive) could only help. Or, in the event of an automated process (no manual review) for the application of a product, if the result isn't desireable there's a chance with a recon (manual review) that again the favorable relationship could slightly impact the outcome in a positive way.

If you've got say 10 years of history with a bank, have an account or two already with them on your credit report that's perfect and have a bunch of assets with them I can only see that as being a positive thing compared to someone with zero history with that bank that's gunning for the same product.

Re: Do Banking Relationships Still Matter?

SouthJamaica — Sat, 01 Jul 2017 01:31:17 GMT

@Anonymous wrote:
This topic has been debated quite a bit in the past and when all the dust settles by the end of one of these threads, typically you have opinions on both sides. Some feel that relationships don't exist or matter, where others will swear they do to some degree.

I sort of land somewhere in the middle I suppose. I agree with most of what SJ said, that regardless of any "relationship" a bank won't hesitate to cut you off for any reason that they or their computer system deems worthwhile.

Where a "relationship" may be a positive thing could be during the application process. This could be an application for a credit card, loan, or other product. If you have a previous favorable relationship with that bank and the product you apply for involves a manual review, that relationship (assuming it's positive) could only help. Or, in the event of an automated process (no manual review) for the application of a product, if the result isn't desireable there's a chance with a recon (manual review) that again the favorable relationship could slightly impact the outcome in a positive way.

If you've got say 10 years of history with a bank, have an account or two already with them on your credit report that's perfect and have a bunch of assets with them I can only see that as being a positive thing compared to someone with zero history with that bank that's gunning for the same product.

You seem to be saying that years of history with the institution should count for something.

And with that, I agree wholeheartedly.

But in your own experience do you have any evidence that it does count for something?

I don't.

Re: Do Banking Relationships Still Matter?

tacpoly — Sat, 01 Jul 2017 02:51:55 GMT

Relationships matter when you keep a large amount of money (7+ figures) at the financial institution. If you have that, they will give you slack and benefits.

Re: Do Banking Relationships Still Matter?

Anonymous — Sat, 01 Jul 2017 03:59:27 GMT

@tacpoly wrote:
Relationships matter when you keep a large amount of money (7+ figures) at the financial institution. If you have that, they will give you slack and benefits.

Realistically, it doesn't matter if you've had over $1mm in the bank for years if you've fallen on hard times. A 'relationship' with a bank won't help you if you've lost your shirt in the stock market and need to get a mortgage in your depleted state and without sufficient income. They'll treat you well when times are good but won't be happy to work with you again until you've picked yourself back up off the floor!

I just wrote a high six figure check at the bank to fund a new account today. Everyone knew my name before I left, but they would forget me in a heartbeat if I lost everything.

Re: Do Banking Relationships Still Matter?

Anonymous — Sat, 01 Jul 2017 05:14:18 GMT

@SouthJamaica wrote:
You seem to be saying that years of history with the institution should count for something.

And with that, I agree wholeheartedly.

But in your own experience do you have any evidence that it does count for something?

I don't.

I am saying that it does count for something in these situations. The problem is, there's no way to quantify it. Short of an employee actually saying the words, "we can work with you on that because you've been a great customer of ours for years..." I don't know how anyone would ever be able to quantify it. Since those words have never been spoken to me, I can't say for sure.

About 2 months ago I applied in branch for a Chase credit card. Aside from my local credit union, Chase is the bank I have checking/savings accounts with, have my weekly pay check direct-deposited at, etc. When I applied for the credit card, the person I went through the process with knew me, about my family, where I worked and so on. That "relationship" made me feel better about applying. Can I quantify how much better? Nope. Is that relationship the reason for an approval on the card rather than a denial? More than likely not. Had I run into an issue with the app or needed a recon, do I think the guy I had dealt with several times in the past would have been in my corner? Absolutely. Would it have mattered? Who knows. Again, there's no way to quantify these things or be sure, so much of what I go off of are stories I read on here that are similar to the blurb I shared above.

Based on those stores, there are a handful of people (say 25%) that swear that their prior relationship "helped" them in some way, where the remaining majority may feel that it didn't matter. I can assure you, though, that I've read zero stories about a prior relationship actually hurting anyone in these sort of situations. Based on that and the fact that plenty of people have shared favorable stories regarding prior relationships, I'd think it's a fair assessment to say that "it can only help" even if the degree of help cannot be quantified.

I wholeheartedly agree that any time something adverse happens with any relationship, all bets are off and years of favorable history can go right out the window. And, that's not just with big banks. I had around 20 years of perfect history with my local credit union. Checking/savings accounts, several auto loans, credit card, etc. all with perfect account history. When I received a late payment on a couple of other accounts (not my CU accounts) my CU was the only person to take AA against me, closing my CC with 15+ years of flawless history on me. The CU would not recon the decision, even after talking to probably a half dozen different people including the highest-ups that I could get to. The 20 year relationship I had with them was no better than a 20 minute relationship in that case.

The bottom line is that if you have a favorable relationship with a bank, make sure it says that way if you'd like any chance at all of it meaning anything.

Re: Do Banking Relationships Still Matter?

SouthJamaica — Sat, 01 Jul 2017 11:37:08 GMT

@Anonymous wrote:
@SouthJamaica wrote:
You seem to be saying that years of history with the institution should count for something.

And with that, I agree wholeheartedly.

But in your own experience do you have any evidence that it does count for something?

I don't.
I am saying that it does count for something in these situations. The problem is, there's no way to quantify it. Short of an employee actually saying the words, "we can work with you on that because you've been a great customer of ours for years..." I don't know how anyone would ever be able to quantify it. Since those words have never been spoken to me, I can't say for sure.

About 2 months ago I applied in branch for a Chase credit card. Aside from my local credit union, Chase is the bank I have checking/savings accounts with, have my weekly pay check direct-deposited at, etc. When I applied for the credit card, the person I went through the process with knew me, about my family, where I worked and so on. That "relationship" made me feel better about applying. Can I quantify how much better? Nope. Is that relationship the reason for an approval on the card rather than a denial? More than likely not. Had I run into an issue with the app or needed a recon, do I think the guy I had dealt with several times in the past would have been in my corner? Absolutely. Would it have mattered? Who knows. Again, there's no way to quantify these things or be sure, so much of what I go off of are stories I read on here that are similar to the blurb I shared above.

Based on those stores, there are a handful of people (say 25%) that swear that their prior relationship "helped" them in some way, where the remaining majority may feel that it didn't matter. I can assure you, though, that I've read zero stories about a prior relationship actually hurting anyone in these sort of situations. Based on that and the fact that plenty of people have shared favorable stories regarding prior relationships, I'd think it's a fair assessment to say that "it can only help" even if the degree of help cannot be quantified.

I wholeheartedly agree that any time something adverse happens with any relationship, all bets are off and years of favorable history can go right out the window. And, that's not just with big banks. I had around 20 years of perfect history with my local credit union. Checking/savings accounts, several auto loans, credit card, etc. all with perfect account history. When I received a late payment on a couple of other accounts (not my CU accounts) my CU was the only person to take AA against me, closing my CC with 15+ years of flawless history on me. The CU would not recon the decision, even after talking to probably a half dozen different people including the highest-ups that I could get to. The 20 year relationship I had with them was no better than a 20 minute relationship in that case.

The bottom line is that if you have a favorable relationship with a bank, make sure it says that way if you'd like any chance at all of it meaning anything.

Those words have never been spoken to me either.

Re: Do Banking Relationships Still Matter?

EAJuggalo — Sat, 01 Jul 2017 12:27:14 GMT

Those words have been spoken to me. I went into my credit union last year year right when I started rebuilding and talked to them about an auto loan. They told me that the only reason I was approved at all was because of my relationship with th e CU at that time. When this happened I had no credit score and the only thing on my credit report was a 14 year old auto loan from Chase. I didn't get the best interest rate but it still came in at 60% of what the dealer's offer was.

Re: Do Banking Relationships Still Matter?

Anonymous — Sat, 01 Jul 2017 13:05:02 GMT

@SouthJamaica wrote:

Those words have never been spoken to me either.

And I don't think it's common that they would be spoken, even if a banking relationship did have a positive impact in a certain situation. But the post above just verified that those words have been spoken, so there's the answer that banking relationships DO help at times.

I think the more important question here is whether anyone has ever experienced the opposite... that is, a prior/lengthy banking history/relationship hurting. THAT is something that I've never heard of. And, until I do, we can continue to say that a prior relationship "can only help..."

A similar debate that comes up in the CC forum is whether or not a heavy spend positively impacts CLI attempts. Some say it does, some say it doesn't. Those that say it doesn't reference that they barely spent anything on a card but still got a solid CLI. Those that say it do reference that following their big spends/payments that they've seen the most favorable CLIs. Again, though, I've never heard anyone say that a big spend and payment on a CC hurt their CLI chances or result. A million people may come along and say based on their experience that it doesn't/didn't help, but none are going to say that it hurt. I feel that this topic exactly mirrors the banking relationship debate.

Re: Do Banking Relationships Still Matter?

Thomas_Thumb — Sat, 01 Jul 2017 17:59:40 GMT

@Anonymous wrote:
@tacpoly wrote:
Relationships matter when you keep a large amount of money (7+ figures) at the financial institution. If you have that, they will give you slack and benefits.

Realistically, it doesn't matter if you've had over $1mm in the bank for years if you've fallen on hard times. A 'relationship' with a bank won't help you if you've lost your shirt in the stock market and need to get a mortgage in your depleted state and without sufficient income. They'll treat you well when times are good but won't be happy to work with you again until you've picked yourself back up off the floor!

I just wrote a high six figure check at the bank to fund a new account today. Everyone knew my name before I left, but they would forget me in a heartbeat if I lost everything.

The importance of saving money

and it's gone - Please step aside for people who actually have money with the bank.

http://southpark.cc.com/clips/27im67/the-importance-of-saving-money

Re: Do Banking Relationships Still Matter?

pipeguy — Sat, 01 Jul 2017 18:09:55 GMT

In my experience, smaller community banks (before they get bought out by larger ones) and in come cases Credit Unions (not PenFed !) do try to work with their customers, as far as large banks, its "what have you done for me lately?" and you are just a disposable number - Capital One I can say for sure a 20 year relationship (including merging in of Chevy Chase Bank) and a high cash 6 figure balance in your accounts, mean absolutely nothing.

Re: Do Banking Relationships Still Matter?

Anonymous — Sat, 01 Jul 2017 18:43:32 GMT

BBS has surely hit the mark when he has distinguished two scenarios:

(1) The person with the long positive banking relationship, and who currently is in great shape, making further requests.

(2) The person with the long positive banking relationship, and who (due to recent events) is now in bad shape, and is asking for special favors. I have lost my job, my wife's divorcing me and taking everything, I made some risky investments and lost everything, my daughter has cancer and I won't be able to pay the mortgage, etc.

Some people are talking about #1. Others are talking about #2. Others are sort of talking about both. And often there is a lack of explicit awareness of which one he is talking about.

I am aligned with BBS on #1. My guess is that the relationship does help. I base this on several things. My local bank does indeed do stuff for me that none of the major banks were willing to do. For example, they were willing to do a 1-time hard pull for my pre-qual letter for a mortgage (a letter which by industry standard lasts only for 90 days). They were willing to renew it for several 90 day periods in a row without a hard pull, which all the bigger places said "Sorry, but our policy. is to do a hard pull each time." My local bank has done other things like that.

I also base this on customer service reps who will actually say: "We can see you have been a customer with us for a long time and we want to thank you for that. Is there anything we can be doing for you?" I do not hear this except when in fact I have been with them for several years, having more than one product.

#2 I am less surprised with, since it has to do with risk managment. Actually, in cases like this, it is probably important for bank employees to NOT let warm personal feelings to cloud their judgment if the consumer has a highly risky profile.

Re: Do Banking Relationships Still Matter?

Anonymous — Sat, 01 Jul 2017 23:27:10 GMT

CGID, nice job breaking down the discussion into sectors #1 and #2 above. I too think that many people aren't distinguishing between the two. Or, another possibility is that they've experienced #2 which is then influencing their feelings on #1.

Like several others, I have experienced both and have no problem at all seeing each for exactly what it is, exclusive of the other.

Re: Do Banking Relationships Still Matter?

Glen_M — Sun, 02 Jul 2017 03:53:16 GMT

@tacpoly wrote:
Relationships matter when you keep a large amount of money (7+ figures) at the financial institution. If you have that, they will give you slack and benefits.

Someone who has no relationship could walk into the same bank with those 7+ figures and get the same service. They don't care about you or your relationship, just the $$$

Re: Do Banking Relationships Still Matter?

tacpoly — Mon, 03 Jul 2017 01:54:16 GMT

@Glen_M wrote:
Someone who has no relationship could walk into the same bank with those 7+ figures and get the same service. They don't care about you or your relationship, just the $$$

Sure, and I've taken advantage of just that.

Re: Do Banking Relationships Still Matter?

adelphi_sky — Mon, 17 Jul 2017 14:48:44 GMT

An excellent case in point this past weekend. I have a 12-year history with a bank. My wife went in to set up a business account. We have our direct deposits and a HELOC. I've had a credit card with them that I paid in full a few years back. We go in to set up my wife's account. WE also open up another checking for my wife's discretionary spend account. Our deposits total about $150k per year. They tell me I'm pre-approved to apply for their cards. I'm hesitant because this bank hasn't been the friendliest when it comes to credit cards. Before paying off the last credit card, I asked for a $500 CLI and was denied. lol Pissed me off, so I paid it off with part of my annual bonus.

So, this weekend, I figure, what the hell, my bonus is coming up in a few months, let me app, use the BT offer, and pay down some other debt. I app in-branch. I get approved for $1000. lol I have more than that in cash sitting in the bank. Really? Is that what our relationship results to? I haven't had a starting credit line that low since college. So, a 12 year history with not a single negative payment history, $150k, and applying for more products from this bank got me a $1000 limit. I'm so frustrated. Perhaps I've been spoiled with the $10k starting credit lines. I would have been okay with a $5k line, but $1k?

Re: Do Banking Relationships Still Matter?

Anonymous — Tue, 18 Jul 2017 03:54:51 GMT

You mentioned paying down other debt. What is your current credit card utilization? If your utilization is outside of the ideal range, it's possible that your current utilization adversely impacted your ability to secure a solid SL on the new card you just apped for. You also mentioned you had a CC with them in the past and that you "paid in full" a few years back. I'm not sure if your PIF comment means you never carried a balance on it, or if you did carry balances on it and just finally paid it off (and possibly closed it). If it was the case that you were carrying balances on it, especially if they were significant, that this history is on file with them and also impacted their decision to some degree.

Re: Do Banking Relationships Still Matter?

adelphi_sky — Tue, 18 Jul 2017 14:27:05 GMT

@Anonymous wrote:
You mentioned paying down other debt. What is your current credit card utilization? If your utilization is outside of the ideal range, it's possible that your current utilization adversely impacted your ability to secure a solid SL on the new card you just apped for. You also mentioned you had a CC with them in the past and that you "paid in full" a few years back. I'm not sure if your PIF comment means you never carried a balance on it, or if you did carry balances on it and just finally paid it off (and possibly closed it). If it was the case that you were carrying balances on it, especially if they were significant, that this history is on file with them and also impacted their decision to some degree.

It's probably more about it being a computer than a human who gave out that SL. I will call and see what they can do. I have a balance I want to transfer after I pay off some cards with my bonus.