Nasty Surprise Post-BK from US Bank

[Anonymous]

So, I applied for and I'm qualified for a Secured Skypass Visa from US Bank (meaning that until they get confirmation that they did transfer the $1,000 security deposit from my savings account, they can't say that I'm approved but I'm pretty much approved) and I was speaking with a lady at their call centre over the phone. One of my questions got her thinking and looking at my credit report and she noticed my bankruptcy (as it was filed in January of last year) and she told me that US Bank has a hard rule that they don't give unsecured credit for five years post filing, so I won't be qualified to graduate to an unsecured card with US Bank until February 2022!

[Anonymous]

Doesn't matter much, you will still be building history with them and that counts for a lot with US Bank and other banks who will note your responsible pay history.

A BK on your profile can break deals with lots of banks, it's nice that US Bank accepts it and still offers a secured card.  Some secured cards don't allow a BK, which is senseless.

[Anonymous]

True, but do you know if they report to the credit bureaus as unsecured or as secured? I ask because my On Tap Visa from my credit union reports as unsecured.

[Anonymous]

OP,

I don't know how US bank reports but I know for sure both Wells Fargo and Discover report secured card as secured on TU.  However, I don't think fico takes into consideration whether the accounts are secured or not.  What matters to fico is your on-time payment for each account and your UTI.

Maybe someone else who has US Bank will chime in.

Good luck! 

[Anonymous]

Out of curiousity, how is a high utilization handled historically.Like, if the first month I got my cards, my utilization is like 86% (because I did just fund three secured cards, paying $2,600 for three secured cards) and the next month and all the following months, it's closer 5%, how does that look?

[happypill]

I think the OPs concern is that they'll be holding onto the $1000 security deposit at least until 2022 and there might be better ways to put that money to work.  You might consider looking into a BofA secured card.  Not sure their policy on BK, but they do seem to graduate pretty regularly within a year if you treat it right.

[Shadowfactor]

I had a US bank secured card. The regular version.

It reported as a secured credit card. FICO does not calculate different for secured or unsecured. But a manual review will show it.

It’s not uncommon for banks to deny app’s Post BK for 5 years. Chase and Amex have very similar rules. Chase used to be 5 years post discharge but I’ve been reading that it’s now the entire time it’s on your credit report.
Amex is 5 years + 1 month.

[Anonymous]

I've applied for their secured card (as I already have a chequing account with BoA) and I was rejected. Though, I never got a letter explaining why I was rejected. Right now though, I'm thinking about holding off on any new accounts and letting my current collection of accounts age and build a positive history with the bureaux. I already have five cards (three of which are unsecured), with one more on the way, and a creditbuilder "line of credit" through my credit union. I think if I wait six months, get my utilization down, and make good on my payments, I should be able to get some better cards.

[Anonymous]

Shadow,

Darn, I was talking to a person from Chase's reconsideration line and they didn't say anything about bankruptcy being a disqualifier for the entire length of time your bankruptcy is reported. Gee, that sucks.

Hopefully, by then, I'll be able to have a bit more of a diversified credit report. My credit union says that I'm only prohibited from getting a car loan from them two years post-BK and a mortgage in four.

[Anonymous]

---

wrote:

Shadow,

Darn, I was talking to a person from Chase's reconsideration line and they didn't say anything about bankruptcy being a disqualifier for the entire length of time your bankruptcy is reported. Gee, that sucks.

Hopefully, by then, I'll be able to have a bit more of a diversified credit report. My credit union says that I'm only prohibited from getting a car loan from them two years post-BK and a mortgage in four.

---

That is not true about Chase rejecting BK filers for the entire time. Someone posted that in a thread, but later updated the thread to say the information was incorrect. You will be automatically declined with Chase if you have a BK, but many have been able to reconsider sucessfully.