Amex Pre-Approval BCP Denial - For Being Responsible!?

[OmarGB9]

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@Anonymous wrote:

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@Anonymous wrote:

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This... right here. ***

@coldfusion wrote:

Checking, savings, and money market accounts are not bank cards.   

You have a 72 month car loan outstanding with nearly 80% of the amount remaining. 

Your oldest active credit card is 17 months old and based on your inquiries you don't have more than 3 open. 

And yes, too few cards can be detrimental to your profile. 

Lenders in general have pulled in their claws recently due to the surge in COVID-19 related defaults and you were probably denied because they feel you don't have enough of a recent track record managing unsecured credit combined with a fairly significant committment remaining on the car loan.  It's not just you,  AMEX has even been taking AA against established cardholders. 

Surprised at the suggestion you FAX in documents for reconsideration instead of calling in and requesting.  

If you're not successful, just take it in stride and look for another issuer.    Plenty of fish in this sea. 

Good luck. 

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I want to say that I'm not a credit expert here, but I'm trying to get some insight into how these things translate into what is preceived as risk for a person with a moderate 7 figure net worth that owns (as in it's mine... No payments.) a respectable real estate portfolio and has a very low DTI with a moderate 6 figure income... Add in the stability of no spree credit and no derrogatory remarks on my report... I guess thats why I studied engineering and not finance. Too much "magic" in it for me to wrap my mind around it all.

First credit card is through TD bank. Thats a bank credit card. I also have a debit card for an account I have with them as well. Thats a bank card. I have a debit card through my credit union tied to a checking account I have with them. Thats a bank card. Neither of these debit cards are required to report as existing. Seems odd it would be a denial reason.

Has no one ever been approved for an AmEx with a car loan younger than 2.5 - 3.5 years (average mid point for current autoloan durations)? Are you suggesting people can't get approved for AmEx until they have roughly half of their auto paid off? I've used the forecast simulators and I see that if I pay that loan off in full right now, it'll actually hurt my score over the next 6 months. This line of reasoning is what confuses me about this.

As far as oldest active (very active) card is 17 months and I *only* have 2 active cards...  So I can go crazy and file several apps today, and get approved, and AmEx will see me as LESS risk than I currently am?! That doesn't seem right. 2 cards in 17 months with the last being 7 months ago seems like a pretty good spread. Do I need to play chicken and feign being a little wreckless with credit to get into that sweet spot to be just the right amount of unstable for them to "like" me?

I'm genuinely asking here. I know it sounds condescinding, but will those maneuvers really help me? 

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Debit cards are NOT bank cards. Bank cards refers to major credit cards issued by national banks, as opposed to store credit cards that are limited to just one particular store.

You have good income and a good profile, but in their eyes I guess it's "inexperienced" because you don't have three credit lines and don't show enough usage I suppose. Yes paying your debts is a good thing of course, but you also have to let some sort of balance report from time to time to show actual usage. Amex wouldn't know if you're swiping other lenders' CCs if no balance ever posts.

Also, pay no mind to the simulators, they are not accurate. They're merely an educational tool.

And yes, as crazy as it sounds, having more credit accounts (3 CCs + 1 installment loan) makes you less "risky" because it shows you can handle different types of credit and you have enough accounts that you can manage responsibly. No you don't have to have your car loan paid down to half or less, but in the current economic climate, this could be what's making the difference.

[Remedios]

You got denied because no one knows how you'd play with someone else's money.

Loans such as auto and mortgage are different, because there is collateral involved. If you default, they can repossess or foreclose.

When a person defaults on credit cards, what are they going to do? 

Taking back a piece of plastic wont do them any good. 

In the past, Amex wasnt averse to thin or young files, but when economy gets tougher, everyone is trying to mitigate the risk, and denials are one way to do it.

You could  benefit from credit card account, but it's not going to be Amex.

While you saw someone who in your opinion shouldn't have been approved, I've seen members with extensive history getting denied (usually for too many new accounts), which is also a risk mitigation in case person is serial apper in search of SUBs. 

I dont know who would be more open to someone with limited history in the current climate. Typically it was Discover and Amex. 

You might want to look into Discover abd see if their card(s) would fit your needs. 

[randomguy1]

A long mortgage/auto history with little to no credit cards could mean several things to lenders. Sure, you could be a person who never used credit cards much... Or you could be a person like me who faced some hardship, went delinquent on accounts, had them changed off, and they are no longer on my credit report. 

My guess would be there are more profiles like mine than there are people who rarely used credit cards. Regardless, banks have their criteria and data to back up what profiles are higher risk than others. Your profile was deemed as a higher risk hence your denial. Try the alternatives such as credit unions or other banks such as Discover or Capital One. 

ps. Try not to compare your credit profile to someone else's. There might be much more data there that you don't know of. Comparison is the thief of joy. 

[Anonymous]

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@Remedios wrote:

You got denied because no one knows how you'd play with someone else's money.

Loans such as auto and mortgage are different, because there is collateral involved. If you default, they can repossess or foreclose.

When a person defaults on credit cards, what are they going to do? 

Taking back a piece of plastic wont do them any good. 

In the past, Amex wasnt averse to thin or young files, but when economy gets tougher, everyone is trying to mitigate the risk, and denials are one way to do it.

You could  benefit from credit card account, but it's not going to be Amex.

While you saw someone who in your opinion shouldn't have been approved, I've seen members with extensive history getting denied (usually for too many new accounts), which is also a risk mitigation in case person is serial apper in search of SUBs. 

I dont know who would be more open to someone with limited history in the current climate. Typically it was Discover and Amex. 

You might want to look into Discover abd see if their card(s) would fit your needs. 

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Agree with this. 

Good income and business practices may allow a lender to extend you more credit since you're able to pay it back. But without a lender seeing the actual habit of paying it back, they have no idea what you might do. 

As for someone with UE benefits getting approved. UE benefits are a somewhat steady source of short term income (albeit a small amount). If they had a history of good payment, a lender may feel comfortable that they'll get paid back by that person. Sure, maybe they won't be extended as much credit as someone with a high income, but with a good payment history the lender would feel comfortable extending an appropriate credit limit and getting paid back. 

[CreditCrusader]

I'm going to say something here...not specifically to the OP (though I believe it applies), but to ALL getting denied cards, CLIs, etc.:

The United States economy is now officially in recession...a horrible one.

Second quarter GDP contracted 32.9%. Think about the trillions of dollars that contraction represents. You cannot expect credit card lenders to respond as they would have in 2019. They are clenched up right now...and with several large states more or less keeping their economies static due to COVID, they will remain this way until a viable vaccine is available to the public and the economy starts to recover.

As an accompanying data point, my daughter is a young adult with 760-768 FICO scores and a pretty solid credit/income/DTI profile. She was denied an Amazon STORE card recently...not the Chase version, just the plain store card.

These are the times we are living in right now. It's a pain and I understand the frustration, but the context of the economic reality cannot be forgotten.

[CreditInspired]

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@CreditCrusader wrote:

I'm going to say something here...not specifically to the OP (though I believe it applies), but to ALL getting denied cards, CLIs, etc.:

The United States economy is now officially in recession...a horrible one.

Second quarter GDP contracted 32.9%. Think about the trillions of dollars that contraction represents. You cannot expect credit card lenders to respond as they would have in 2019. They are clenched up right now...and with several large states more or less keeping their economies static due to COVID, they will remain this way until a viable vaccine is available to the public and the economy starts to recover.

As an accompanying data point, my daughter is a young adult with 760-768 FICO scores and a pretty solid credit/income/DTI profile. She was denied an Amazon STORE card recently...not the Chase version, just the plain store card.

These are the times we are living in right now. It's a pain and I understand the frustration, but the context of the economic reality cannot be forgotten.

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Hear, hear

[CreditInspired]

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@Anonymous wrote:

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@Remedios wrote:

You got denied because no one knows how you'd play with someone else's money.

Loans such as auto and mortgage are different, because there is collateral involved. If you default, they can repossess or foreclose.

When a person defaults on credit cards, what are they going to do? 

Taking back a piece of plastic wont do them any good. 

In the past, Amex wasnt averse to thin or young files, but when economy gets tougher, everyone is trying to mitigate the risk, and denials are one way to do it.

You could  benefit from credit card account, but it's not going to be Amex.

While you saw someone who in your opinion shouldn't have been approved, I've seen members with extensive history getting denied (usually for too many new accounts), which is also a risk mitigation in case person is serial apper in search of SUBs. 

I dont know who would be more open to someone with limited history in the current climate. Typically it was Discover and Amex. 

You might want to look into Discover abd see if their card(s) would fit your needs. 

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Agree with this. 

Good income and business practices may allow a lender to extend you more credit since you're able to pay it back. But without a lender seeing the actual habit of paying it back, they have no idea what you might do. 

As for someone with UE benefits getting approved. UE benefits are a somewhat steady source of short term income (albeit a small amount). If they had a history of good payment, a lender may feel comfortable that they'll get paid back by that person. Sure, maybe they won't be extended as much credit as someone with a high income, but with a good payment history the lender would feel comfortable extending an appropriate credit limit and getting paid back. 

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And OP, one cant believe everything one reads. Who even knows if this was true or not?