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Amex denial due to loan modification

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mrcrisp023
Frequent Contributor

Amex denial due to loan modification

Hi All,

 

I did an app for the Amex green charge card just to see what would happen since it would  only be a soft pull if I didn't take it or was denied. I expected a denial, but the reason I got back was surprising: 

 

"You are participating in a payment relief or deferral program, receiving modified terms, or credit counseling services, on one or more of your accounts or loans."

 

That was the only denial reason I was given. During Covid, I got behind on my mortgage payments and did a loan mod to get caught up and have been on time since. How long is this going to hinder me from getting an approval?  Should I call the back door number for more insight?  Was that the only reason for the denial?

 

Thanks. 

Capital One SavorOne: $3000 / Bank of America Unlimited Cash Rewards Visa Signature: $500 / Mission Lane: $1000 / Merrick: $1000 / CreditOne Amex: $600

Starting 09/2022 MyFico 08: EQ 648 / TU 659 / EX 644
Current MyFico 08: EQ 684 / TU 701 / EX 678

2023 EOY Goal: 750
Message 1 of 20
19 REPLIES 19
FireMedic1
Community Leader
Mega Contributor

Re: Amex denial due to loan modification

Sorry about that. I was past the required wait time after BK to apply. I was denied for too many new checking accounts. I joined NFCU and opened 1 checking account. Yes a checking account. Waited a year and approved for the BCP. Just another denial DP.


Message 2 of 20
pizzadude
Credit Mentor

Re: Amex denial due to loan modification


@mrcrisp023 wrote:

Hi All,

 

I did an app for the Amex green charge card just to see what would happen since it would  only be a soft pull if I didn't take it or was denied. I expected a denial, but the reason I got back was surprising: 

 

"You are participating in a payment relief or deferral program, receiving modified terms, or credit counseling services, on one or more of your accounts or loans."

 

That was the only denial reason I was given. During Covid, I got behind on my mortgage payments and did a loan mod to get caught up and have been on time since. How long is this going to hinder me from getting an approval?  Should I call the back door number for more insight?  Was that the only reason for the denial?

 

Thanks. 


You can always request a recon but I think it's likely they'll give you the same answer as their underwriting process view this as a negative factor.  

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Message 3 of 20
mrcrisp023
Frequent Contributor

Re: Amex denial due to loan modification

So I just spoke with my loan servicer about getting the comments removed but they said since I had the loan modification, the comments have to stay there for the entire lifetime of the loan. So as long as I'm in this house the comments have to stay there. That's extremely excessive to me. I don't know if it's worth even calling the back door number for Amex. 

Capital One SavorOne: $3000 / Bank of America Unlimited Cash Rewards Visa Signature: $500 / Mission Lane: $1000 / Merrick: $1000 / CreditOne Amex: $600

Starting 09/2022 MyFico 08: EQ 648 / TU 659 / EX 644
Current MyFico 08: EQ 684 / TU 701 / EX 678

2023 EOY Goal: 750
Message 4 of 20
OmarGB9
Community Leader
Super Contributor

Re: Amex denial due to loan modification


@mrcrisp023 wrote:

So I just spoke with my loan servicer about getting the comments removed but they said since I had the loan modification, the comments have to stay there for the entire lifetime of the loan. So as long as I'm in this house the comments have to stay there. That's extremely excessive to me. I don't know if it's worth even calling the back door number for Amex. 


Wouldn't cost anything to try (other than maybe some wait time)! Maybe you could get insight as to how long you'd have to wait for that effect to "fade."

 

I wonder also if you call your loan servicer back and speak with a different rep, if they'll give you the same answer; or perhaps you can escalate to a manager and get the comment removed. 


Last App: 1/10/2023
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Message 5 of 20
SDMarik
Established Contributor

Re: Amex denial due to loan modification


@mrcrisp023 wrote:

So I just spoke with my loan servicer about getting the comments removed but they said since I had the loan modification, the comments have to stay there for the entire lifetime of the loan. So as long as I'm in this house the comments have to stay there. That's extremely excessive to me. I don't know if it's worth even calling the back door number for Amex. 


I know a few people who had this issue pop up, unfortunately even though it was an extenuating circumstance (covid) and people were almost encouraged to take mod/releif, issuers still view this in the same light as credit counseling/consolidation services, deferment, etc, which I don't think is totally fair. Yes, historically these things are utilized by people who are in a situation where they can't stay on top of their payments, due to something that may or may not be their fault, but this particular one should have been handled differently. I think the banks could have offered this without reporting it, unless an account went negative.

 

So many people took advantage of this, but it was not made abundantly clear that it would report on your file in a negative light. I get that it is on the consumer to read the fine print, and I'm not saying it should not be noted anywhere, but to present it in a way that can prohibit an otherwise responsible borrower from obtaining credit, seems slightly unfair.



"When prosperity comes, do not use all of it"
Message 6 of 20
Zoostation1
Established Contributor

Re: Amex denial due to loan modification

If it stays on for the life of the mortgate that seems like it be a massive headache for people.  I'm not a lawyer and don't know any of the laws regarding it but it seems like this could stay on the record longer than even a BK7?  Am I reading this correctly?

Rebuild Started Nov 2021
June 2022 FICO 8:
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Message 7 of 20
mrcrisp023
Frequent Contributor

Re: Amex denial due to loan modification

That’s what she said. I asked 2 or 3 times to make sure I was clear and she doubled down each time. I’m tempted to call back and get a different rep. Seems ridiculous.
Capital One SavorOne: $3000 / Bank of America Unlimited Cash Rewards Visa Signature: $500 / Mission Lane: $1000 / Merrick: $1000 / CreditOne Amex: $600

Starting 09/2022 MyFico 08: EQ 648 / TU 659 / EX 644
Current MyFico 08: EQ 684 / TU 701 / EX 678

2023 EOY Goal: 750
Message 8 of 20
805orbust
Valued Contributor

Re: Amex denial due to loan modification

Although the remark will stay on there for the life of the loan, I'm sure it won't affect their decision making forever.  Surely there will be a time period where the effects will begin to diminish... just my opinion however, which, with a dollar won't even get you on a train anymore.

 

 



Message 9 of 20
mrcrisp023
Frequent Contributor

Re: Amex denial due to loan modification

What makes me unsure is there’s no date on the comment. They can’t tell from looking when it was from. Even if I go 7 years never missing a payment they’re still gonna see that the loan was modified at some point.
Capital One SavorOne: $3000 / Bank of America Unlimited Cash Rewards Visa Signature: $500 / Mission Lane: $1000 / Merrick: $1000 / CreditOne Amex: $600

Starting 09/2022 MyFico 08: EQ 648 / TU 659 / EX 644
Current MyFico 08: EQ 684 / TU 701 / EX 678

2023 EOY Goal: 750
Message 10 of 20
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