Denied because of my Student Loans? - Chase

[Anonymous]

I'm currently a student in college, and I decided that I wanted a rewards credit card. Last May I went to a Chase Bank and was advised that the Chase Freedom Unlimited credit card was a good choice for me. I applied for it and got rejected, and the letter they sent just cited my age of credit history as why I was not approved. At that time I did some research and was advised that Chase somewhat loosely requires a 1 year history of a open credit line. My current credit card was only 10 months old at that time, so I waited until yesterday, when I applied again, this time with my first credit card at 1.3 years of age. This time I was denied again, but the reason I was given was:

"Your credit report shows proportion of loan balance to loan amounts is too high."

Now I have 3 different student loans accounts:

1y 3m - 4,500 - Dept. of Ed/ Nelnet 

3m - 2,750 - Dept. of Ed/ Nelnet

3m - 2,750 - University (Perkins Loan)

The amount will only increase until I graduate (in 2.5 years). 

Otherwise, I have good credit (729 EQ and TU on credit karma), AOAA = 10m on EQ, 11m on TU

 1y 6m - US bank credit card, 0% Utilization PIF (they increased my limit from 1000 to 2000 without me asking - I charge 300-500 on the card every month but I tend to pay it off immediatly after the charge is processed)

Was an authorized user on two of my parent's credit cards - (accounts closed but had multiple years of use, these dont show up on EQ)

No Bad Marks

So I'm currently bewildered - I called the recon line and was told that I probably would get denied to all chase credit cards because of my loans. I tried to tell them that they were student loans but they wouldnt budge. 

Does this mean I essentially cannot get a Chase credit card until I pay off my student loans? (5+ years from now...)

[Anonymous]

I think they don't have to be FULLY paid off, because it says the balance is too high on the accounts. Maybe if they are paid off to a total of $3,000 rather than totaling $10,000, the overall balance won't be too high.

[Kree]

I have 14 student loans with an average utilization of over 100%  (I signed up for PAYE and don't earn enough to actually pay.) 

Chase just gave me a Disney Visa with 730s.

Here is the thing though. Their "stated reason" does not actually have to be their "actual" reason for denial.  If recon says "probably" they mean "I don't care enough to figure it out".

Honestly, with your short history, I think chase is a hard bank to get into. But I could be wrong (others should chime in on this point hopefully). Maybe get a nice Discover card to thicken things up and try again in a few years.  

[Anonymous]

Whoa, do loans in deferment actualy report a current balance higher than original balance???

[Kree]

Well mine aren't in deferrment. They are open and marked "paid as agreed" every month, with a payment listed as $0.

but my reports always says "Percentage of principle paid on your open non-mortgage installment loans 0%"  Probably because myfico won't go into the negative numbers.  When I look at my oldest reports, it all says the same, but the loans still in deferment have a remark of "student loan - in deferment" as well.

[Anonymous]

"Your credit report shows proportion of loan balance to loan amounts is too high."

Usually means your current loan balance is more than your original loan balances.

This usually happens when you put your loan in defferment and the interest keeps calculating.

For instance say you loans original Balance is 15000 but your current balance is 15500.

Your Interest has been added to your original balance or capitalized thats why it a good

reason to continue to at least still pay the interest while your loan is being deferred.

[Anonymous]

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@Anonymous wrote:

Usually means your current loan balance is more than your original loan balances.

This usually happens when you put your loan in defferment and the interest keeps calculating.

For instance say you loans original Balance is 15000 but your current balance is 15500.

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Wow that is bogus.

[Anonymous]

The problem is I'm not going to start paying them off until I graduate, and by that time i'll have more than double the amount in student loans. I am confused since I know a couple people who actually got the Chase Freedom Unlimited card as their first credit card, and they had more student loans than me at the time. So essentialy was the reasons I was denied somewhat bogus?

[LCC_mk14]

I’ve had this cited from discover before on a CLI request. Following for updates.
I’ve always wondered this because especially now, so many have student loans and I just don’t see how it can penalized that badly.

[Casper476]

I agree with the user that said that this is more likely due to your AAoA, not your student loans.

I applied for the same exact card over a year ago and was approved.  I had 4 years worth of student loans that were deferred for the entirety of my college career - I'd never made a payment on them.  Needless to say, my balances were/ are higher than your's.  Actually, they're extremely high in general.  In addition, my Chase card was my first credit card.

It might be in your best interest to try again in a couple years or so, when your AAoA is higher.