Can Denial Be From Account History Over 7 Years?

[Jazee]

I had a Wells Fargo Credit Card that I stopped paying during a divorce about 7 years ago and then ended up paying a settlement amount on it.  I checked last November 2020 and it was on my Experian report.  I applied for a Wells Fargo Propel on Feb 23 and got denied.  I have had the My Experian Service since November so I can see changes to my credit report (and see historical copies of the report).  The denial letter said they pulled Experian (which I saw) and listed only one specific reason for denial which was I had a Wells Fargo Account Not Paid As Agreed.  No other reasons listed.

So I went through all my past Exprerian Credit reports since signing up for My Experian which give you access to your report every 1-2 days.  I found that the Wells Fargo account dropped off my Experian Report Dec 15, 2020!!  

I did read somewhere that technically bureaus don't have to remove an account until 7 years and 180 days since it was first reported deliquent.  

So one of two things are happening here.  Either Experian is giving Wells Fargo more data than they are giving me, or, Wells Fargo is doing an internal database search in addition to pulling my credit report. While the latter seems more plausible, then the denial letter would be woefully misleading because it says they pulled credit information from Experian and lists a specific reason. If Wells Fargo is pulling internally, I would think they are limited to going so far back just like the credit bureaus otherwise the banks could deny you for negative account status from like 20, 30, 40 years ago when you were a teenager.

What's going on here?

[Hex]

Yes they are going by their internal data. Creditors can deny forever based on their internal data. Their money their prerogative. 

[dragontears]

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@Jazee wrote:

I had a Wells Fargo Credit Card that I stopped paying during a divorce about 7 years ago and then ended up paying a settlement amount on it.  I checked last November 2020 and it was on my Experian report.  I applied for a Wells Fargo Propel on Feb 23 and got denied.  I have had the My Experian Service since November so I can see changes to my credit report (and see historical copies of the report).  The denial letter said they pulled Experian (which I saw) and listed only one specific reason for denial which was I had a Wells Fargo Account Not Paid As Agreed.  No other reasons listed.

So I went through all my past Exprerian Credit reports since signing up for My Experian which give you access to your report every 1-2 days.  I found that the Wells Fargo account dropped off my Experian Report Dec 15, 2020!!  

I did read somewhere that technically bureaus don't have to remove an account until 7 years and 180 days since it was first reported deliquent.  

So one of two things are happening here.  Either Experian is giving Wells Fargo more data than they are giving me, or, Wells Fargo is doing an internal database search in addition to pulling my credit report. While the latter seems more plausible, then the denial letter would be woefully misleading because it says they pulled credit information from Experian and lists a specific reason. If Wells Fargo is pulling internally, I would think they are limited to going so far back just like the credit bureaus otherwise the banks could deny you for negative account status from like 20, 30, 40 years ago when you were a teenager.

What's going on here?

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Of course lenders are allowed to keep internal records of people that caused them loss. Amex has been known to deny people for decades based on internal records. 

Just because a delinquent account is not listed on your credit report doesn't mean that the lender has forgiven you. There is no law that requires a lender to "forget" about money owed them, only laws on how long they can sue you and how long the account can be reported. 

[Jazee]

Well I like the reward structure better than NFCU AMEX or Flagship, I did close both my business and personal checking/savings with Wells Fargo in response to their huge scandal where bank reps were opening accounts for customers without their consent (I wasn't one of the people they did it to, but still I decided to revolt.)  I figured I would just use their card for the rewards and pay it off every month so they wouldn't make any significant amount of money off me.  Looks like they won't be making a cent off me indefinitely.  

It shows the balance was last updated March 26, 2014, when I paid the settlement amount, but of course that's probably 6+ months past when it was first reported delinquent which is why it fell off my report in December 2020.  So I may burn an HP on my Experian in 5 months or so to see just out of curiosity if their internal underwriting may have a 7-year limit past when the account was paid off.  I'm an NFCU Member so I'll go for NFCU AMEX as a backup choice.  That card is going to have a lower interest and easier/larger CLI's than Wells Fargo anyway based on all the history of posts I've read in the NFCU thread.  Wells Fargo is pretty conservative in my experience over the years. But if I'm not carrying a balance I prefer the Propel Rewards if I have a choice.  If they deny me past 7 years from payoff, I will never consider them for any financial products again for the rest of my life - that should ruin them, LMAO.

[4sallypat]

Yes, the banks have internal data beyond a credit report.

I also had a failed business during the economic drop in 2009 with BofA and they will not give anything out (car, credit card, mortgage).

[Anonymous]

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@Jazee wrote:

Looks like they won't be making a cent off me indefinitely... 

...If they deny me past 7 years from payoff, I will never consider them for any financial products again for the rest of my life - that should ruin them, LMAO.

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That's your perspective.  Their perspective is that they won't be losing another cent off of you and aren't considering you as a customer based on past history.  They've lost money on you in the past, which is why you're on their blacklist currently.  It all comes down to risk assessment.

[Horseshoez]

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@4sallypat wrote:

Yes, the banks have internal data beyond a credit report.

I also had a failed business during the economic drop in 2009 with BofA and they will not give anything out (car, credit card, mortgage).

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Same here, I had been banking with BofA for years, so last year when my Chapter 13 was discharged following the closure of my failed business, I applied for a secured credit card from BofA and they even denied that.  TDBank was much more accomodating, and they now get all of my banking business.

Regarding banks which have very conservative underwriting rules, I'm wondering just how well they're going to weather the predicted storm of bankruptcies from the COVID thing.  Many financial institutions will be hurt because of the coming tide of filings, but those with liberal underwriting rules may well bounce back much quicker.

[Jazee]

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@4sallypat wrote:

Yes, the banks have internal data beyond a credit report.

I also had a failed business during the economic drop in 2009 with BofA and they will not give anything out (car, credit card, mortgage).

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So they still won't offer you any credit products 12 years later?  Or have you not tried applying for anything in the past couple of years?  

I totally understand the banks perspective.  But what's the whole point of the 7-year rule the credit bureau's need to follow in the first place?  Isn't it to give people the opportunity to demonstrate they are more credit worthy as opposed to penalizing people for the rest of their lives, no?  I understand the Banks have the prerogative to determine their risk tolerance and create whatever underwriting criteria they want.  But still "holding a grudge" since 2009, especially in light of the circumstances at that time, sounds pretty unreasonable to me, even from  a conservative risk-aversion perspective.

[Remedios]

You aren't being penalized.

You closed your accounts with WF because you did not like how they conducted their business with others, and they may not like how you conducted your business with them.

That's not a penalty, that's a choice both you and lender have. 

[4sallypat]

@Jazee Correct, BofA will not extend financing of any kind even after 12 years.

When my car dealer was shopping around for a loan, BofA flatly denied me.

They must have an internal database where I am blackballed...

Even Chase gave me a hard time not approving me for their Chase Bonvoy Marriott card recently due to a very old late (over 10 years ago) on Shell Mastercard I had.