Application Decision Help Need Advice

Jazee · ‎01-16-2021

Bottom line question is:

If I'm borderline qualifying for Chase Freedom Unlimited but already have a Discover It prequal, if I can't get a prequal on Chase should I skip applying to Chase and only apply to Discover?

You can stop reading there if you already have the answer. If you want full history....

According to the various credit reporting tools, two of the reasons for a negative effect on my score is too few accounts, and high utilization. These are the easiest to "fix."

I've got my utilization down to 20%. I got approved for an Amazon Store Card 4 months ago. The only other account I've opened in the past 5 years is an auto loan. I have only three hard inquiries in the last 2 years. 2 of the 3 will be over a year old in two weeks. One of those was getting denied for the Amazon Chase Rewards card about a year ago when my scores were in the 650-670 range.

About a month ago I got a pre-qual offer in the mail for Discover it with 13.99-15.99% APR. I estimate my scores when they did the promotional soft pull for that offer were between 690-720 depending when they pulled and which agency. A few days after that I tried a pre-qual for Chase Freedom, I honestly can't remember my scores when I tried the Chase online prequal but got no offers but I'm pretty sure I was low 700's, nothing over 720.

So my main intention is to increase my total credit. I'm possibly getting some in-home gym equipment which may increase my credit utilization after getting a new card so interest rate comes into play but I could use my Amazon Store card for that. I'm not a big spender so micro-analyzing the difference in rewards is not #1 priority but still a consideration. Discover It and Chase Freedom Unlimited/Flex both have good rewards with Chase edging out Discover overall so it would be the preferred card from that aspect. HOWEVER, I'm 99% sure the Discoer APR is going to be 7-10 points lower than what Chase would give me based on reading at least a hundred approval post on this board. The extended warranty and cell phone protection from Chase is highly attractive though.

So here's the conundrum... My scores now are about 15 points higher than they were when I tried the Chase prequal a couple months ago and they are going to go up a little bit more in a week or so when my utilization goes down from around 20% to closer to 16%. Depending on agency and score type, I'm expecting I'll end up in the 725-740 range.

If I try the Chase Prequal again and get no offer, should I still apply, risking adding a hard inquiry and getting denied? Because then if I went to Discover as a backup, my score will have taken a hit due to the hard inquiry possibly affecting what Discover gives me as far as credit limit and APR.

Or should I "play it safe" and if I don't get anything back from the Chase Prequal online application, skip Chase and just go for the Discover? I guess the question is, is the additional hard inquiry from a denied Chase app going to make a differnce on Discover's decision/terms? (Probably impossible to predict?) One thing that attracts me also to the Discover is I hear it's easier to get a credit line increase from Discover than Chase.

What do you experts recommend I do?

SlideOrInsert · ‎01-16-2021

I'm no expert, but given your goals I would go with discover.

in my experience, chase is very stingy if your profile is limited/just starting. chase gave me two cards (~1k cl ea.) in 2007/2008 that were bucketed AF. in the past two years I combined them and took a couple hard pulls to raise my limit.

discover started me at 10000 cl when my other cards at the time were only about ~1k. when they were my daily driver in the beginning, the increases were easy. they never fliched when I carried a balance transfer for some time. also, the few interactions I've had with customer service have always been great. after not using them at all in 2020, this month I called them and explained I had a few larg-ish (~2k total) purchases coming up and if there were any offers for me. the rep immediately offered no interest on purchases for 12 months.

9/2022
$30000

8/2020
$20000

12/2018
$30000

8/2016
$30000

3/2016
$21000

5/2014
$20000

10/2007
$8900

Jnbmom · ‎01-16-2021

You can try the Chase pre-qualifier but if they don't prequalify you I wouldn't cold app it and they sometimes pull 2 HPs.

I would go with discover if they prequalify you .

EXP 780 EQ 791TU 795

Jazee · ‎01-16-2021

@Jnbmom wrote:
You can try the Chase pre-qualifier but if they don't prequalify you I wouldn't cold app it and they sometimes pull 2 HPs.

It does look like when I applied for Amazon Rewards a year ago, I got two Chase HPs! Bastards! Wonder why that is. Could the first be an automated HP and the second be from it being sent to a manual review process to double check if they can't approve me based on additional information review or explanation. I don't think I called to appeal.

Jazee · ‎01-16-2021

The other thing I failed to mention about the Discover is they take your total cash back for the first year and double it, NO LIMIT. I did some calculations and would easily exceed the $200 bonus offer from Chase as even the minimum 1% reward will be 2% for the first year and the 5% for the rotating categories will then be 10%. Pretty attractive to the cash reward card enthusiasts.

If there's probably a very good chance of getting better terms from Discover anyway, lower APR and higher limit, which seems to be the case based on all the approval posts I read, seems like just wait for my score to bump up when my lower utilization gets reported and go straight to Discover's prequal offer.

Does Chase Prequal divulge what your limit would be? I suppose if I get approved for Discover I could also check the Chase prequal after. But the 2-3 HP's and opening two accounts at the same time is really going to hit my score hard. But honestly I don't anticipate needing to apply for anything requiring credit check for another couple years after this. So should I go for both if I get prequal's from Chase after getting approved from Discover?

FinStar · ‎01-16-2021

@Jazee wrote:
@Jnbmom wrote:
You can try the Chase pre-qualifier but if they don't prequalify you I wouldn't cold app it and they sometimes pull 2 HPs.
It does look like when I applied for Amazon Rewards a year ago, I got two Chase HPs! Bastards! Wonder why that is. Could the first be an automated HP and the second be from it being sent to a manual review process to double check if they can't approve me based on additional information review or explanation. I don't think I called to appeal.

It really depends on your overall profile and what Chase's UW algorithms decide. It's all AI-driven, and just because 2 HPs are pulled doesn't mean it may sit in a review queue with the 2nd hit. If a 2nd HP is triggered or generated, it can still result in auto-denial. No rhyme or reason on what factors may trigger it. Some individuals walk away (approved or denied) with a single HP, and others get the double whammy 🤷‍♂️. Just be prepared.

Jazee · ‎01-16-2021

@Jazee wrote:
So should I go for both if I get prequal's from Chase after getting approved from Discover?

After further thought, I think maybe if I'm willing to take another HP, I'm better off asking USAA for a CLI and thereby not open too many accounts too soon. I've had the USAA card for like 10 years and never asked for a CLI. Plus opening two instead of one new account is going to push me closer to the 5/24 rule limit. I'd go from 2 in the last 24 to 3. I guess that's still well under 5 though so should I get approved for Disco, then check for Chase Prequal, apply if I get it, if not, then ask USAA for CLI. I think the additional payment history along with the increase in credit on also getting the Chase would be more valuable in the long run than just getting the CLI from USAA. I'm sure Chase would balk seeing two HPs from Disco and USAA.

randomguy1 · ‎01-16-2021

It is just a couple of HP.

I would apply for both.

Anonymous · ‎01-16-2021

^^^ this. HPs aren't horrible in moderation, a few points most likely. However, regarding your score, I wouldn't expect it to go up with a 4% drop in usage. Going from 20% to 16% crosses no scoring thresholds - you end up basically smack dab in the middle of the same bracket you're in now.

I would go with Disco. Apping them and then looking for Chase probably won't pay off as Chase is the jealous lover of the credit world. They don't like seeing other cards apped at the same time as theirs.

Get Disco, do your purchases, make payments, and see where everything stands in six months. If you can get under 9% by then, you'll have crossed the border into the best usage bracket and may have a better shot at Flex or CFU then.

Anonymous · ‎01-17-2021

@Anonymous wrote:
^^^ this. HPs aren't horrible in moderation, a few points most likely. However, regarding your score, I wouldn't expect it to go up with a 4% drop in usage. Going from 20% to 16% crosses no scoring thresholds - you end up basically smack dab in the middle of the same bracket you're in now.

I would go with Disco. Apping them and then looking for Chase probably won't pay off as Chase is the jealous lover of the credit world. They don't like seeing other cards apped at the same time as theirs.

Get Disco, do your purchases, make payments, and see where everything stands in six months. If you can get under 9% by then, you'll have crossed the border into the best usage bracket and may have a better shot at Flex or CFU then.

+1

Going from 20% to 16% utilization shouldnt change anything score-wise unless an indivudal card is crossing a threshold? Perhaps you will get a couple points from that depending on how many thresholds you cross, if any.

To cross the next aggregate threshold, you need to get under 10%.