*Update: My reconsideration request was denied. See message #82 in thread for details.
I applied last week for NFCU's More Rewards AMEX and was denied, but waited until I got the rejection letter so that I could post more helpful data points. I'm definitely shocked and perplexed by this denial, perhaps even more so after getting the letter! I'm posting for the benefit of others but also asking for feedback or suggestions. I called Navy customer service and the rep said to wait until after I got the denial letter if I wanted to recon. I doubt it would be useful, but there is a snail mail address I can write to. Opinions on whether a recon would yield results?
For framework, I applied for more new cards last year than I ever have with decades of credit, so I had 7 new accounts in past 12 months. However, one of those was just an AU card and another one I closed immediately after opening. Two more will age over 12 months in August. There was an additional new account opened five days before the Navy application, but it should not have reported yet to the CRB. So yes, it's a lot, but much less than some others have had. I had a similar experience in May with an AMEX rejection, but I thought Navy FCU was much more easy about new accounts than AMEX. So my first thought about the rejection expected it to be solely focused on too many new accounts. It didn't directly mention new accounts, but interestingly, there were other factors.
By the way, for four months straight, my TU FICO reported on NFCU's website has been a perfect 850. Until today, I had never seen my Navy Federal "internal score" that I have seen mentioned.
My history with Navy FCU: I qualified for membership due to my own active-duty military service. I opened checking and savings in Oct 19 so 9 months ago, moderately funded them ($1K - $2K) and let them age for 30 days. No other loans or products. Approved for Platinum card in Nov 19 ($10K SL at lowest APR.) I didn't need the BT offer but I thought that to build payment history I would take advantage by moving $9800 (98% utilization) from other cards and paying it off quickly over three months. It didn't cost me anything as Navy is always $0 BT fee and the offer was 0% for 12 months. I've never swiped the Platinum card or had other balances since it doesn't earn rewards, but I wanted it since it had such a low APR for payment flexibility if I ever wanted that. I haven't used my Navy banking accounts much but they've had $19K parked there most of the last six months so they've had much more than a token deposit. When my Platinum card was about 4.5 months old (April), I asked for CLI and approved for $8K more (now $18K), and they also gave me another $500 last month when I clicked on the CLI request. (CL is now $18.5K) So I asked for a CLI later than many My Fico members and also waited until my credit card was over 7 months old before asking for a second card.
Main rejection reason on front of letter, which I've seen before was "You're reached Navy Federal's Maximum Unsecured Credit Limit." I am puzzled how my limit could only be $18.5K on one card with my profile and given the approval of many others for a second credit card at an additional $25K after less than seven months! I've seen people get this denial on a CLI but then get approved for a new card also! And often with much thinner files or lower credit scores.
In the denial letter, Navy reported my internal score at 427 on a scale of 100 to 450. To me, that would sound like a very high score?!?
"Key Factors that adversely affected your NFCU Credit Score:"
- Number of inquiries on Credit Bureau Report. Well, yeah. But they pull TU, and on that CRB I only had three inquiries, and two of them were from NAVY (my Platinum card and the CLI!) Now, if they had checked my EX file, they would have seen many more.
- Monthly Payments on Revolving Accounts reported last 12 months.
HUH?!? The (ONLY) time I've rolled over a balance from month-to-month was when I did the BT offer with Navy and paid it off much more quickly than necessary!! I've had other four-figure balances on other cards and always paid them in full! Do they not want me to allow anything to post?? - Not enough Balance Decreases on Installment Loans last 12 months. Well, I had a auto loan open within the last 12 months and I actually was paying hundreds of dollars a month extra and paid it off years in advance, so this is totally bunk. Also, my only other installment loan is my mortgage. I've paid on time on it and last year I paid at least an extra $25K towards the principal, but I admit I haven't done that in the past six months. I didn't think it mattered that much. Apparently it does. My mortgage loan is paid about 33% down from original balance.
- Number of Balance Decreases on Non-Mortgage accounts in last 3 months. See above. All of my balances were paid in full except for that one Navy FCU balance transfer that I paid off way early. Certainly they aren't penalizing me for accepting a BT offer and paying it back? (By the way, I always made a point to keep more funds in banking with Navy than I owed to them, demonstating an ability to pay so-as not to set off any alarms.)
Theories and observations:
Maybe this situation isn't a surprise to anyone else, but Navy has behaved differently than I have expected in many ways. They are apparently much more conservative than their reputation on My Fico. Here are my guesses as to why I was denied, but it could be any combination of factors.
(1) Coronavirus and more conservative underwriting? I know they've lowered normal CLIs from $8K to $4K recently and other lenders have been tightening up approvals.
(2) Those new accounts as quoted, although I imagine as with my AMEX that other My Fico members may have been approved for a new card with at least seven new accounts in 12 months?? And oddly enough, my letter didn't directly mention new accounts as much as inquiries and balances posted.
(3) Navy is apparently MUCH more sensitive to Debt-to-Income than I thought. My DTI on my individual income and just a mortgage payment is less than 7.5% of gross monthly and about 6% of household. So why would they even mention that I had not paid down enough of my installment debt early?
(4) It is possible that Navy didn't like my running up a 98% utilization on my Platinum, even if I did pay it off quickly. I was trying to demonstate ability to repay and to justify a larger credit limit since the $10K approval was one of my lowest in recent years.
(5) Balance decreases on other accounts: I had back-to-back $5K balances on my AOD Visa card, but the first was paid down and then I charged additionally. It may have looked like a large balance not being paid. In addition, my CSR balance increased due to the $450 (with adjustment) AF posting and a few other odds and ends.
(6) I wonder if Navy would be more generous if I put more deposit and spend through my checking account?
(7) I wonder if Navy would be more generous if I used and repaid some charges monthly on my Platinum card? I've never seen data points on usage of existing cards with Navy (unlike Capital One and Goldman Sachs Apple, which are both known to need regular swiping to get an increase) but maybe that was a factor with Navy?
(8) I wonder if Navy would be more generous if I had higher balances in deposits or other loan products?
(9) I wonder if Navy won't be more generous until I've been a member for over a year .... or two .... or five???
Feedback appreciated, but maybe Navy is not to be understood.
@Aim_High, Truly very sorryfor your denial
I have felt the sting of it a few times.
ETA: Thank you for sharing.
@M_Smart007 wrote:@Aim_High, Truly very sorryfor your denial
I have felt the sting of it a few times.
ETA: Thank you for sharing.
Thanks @M_Smart007 and I'm always glad to share when I hope it might benefit the community. But I'm also just trying to wrap my head around what it takes to succeed with Navy and trying to understand what they are looking for. For some reason, it seems they really like some profiles much better, and I'm not sure why!! Chase and even PenFed loved my profile 10x what Navy does, and that makes no sense to me. I thought my military background would help. Sometimes, it almost seems that unlike Chase or some other lenders, they shy away from us with higher FICOs and incomes instead of towards us. Or perhaps I already have too much available credit for their taste.
Join the club. They don't care too much for my profile, though it seems they're getting used to me now. I used to wonder the same things. Now, I don't really care.
That is unfortunate about your denial.
I think it's a mixture. Perhaps 1) and some others. As you surmised, CLI used to be 8K and now 4K.
Another possibility is your profile is just too good. Why the algorithms would deny you I do not know.
Maybe allow some time to pass and try again?
Just looked at your cards. Can your income support those limits? Maybe they think they won't get any spend or that you might overextend yourself
@Anonymous, Very well said!!
I'm a bit of a noob, but I can't see anything in your post other than the amount of credit that you already have ($510K) being the reason for them capping you at a maximum of $18.5K. I don't think you need to dig through the "Key Factors that adversely affected your NFCU Credit Score" because, as you noted, your score is quite high. The factors listed probably had marginal impact and they're just listing whatever is responsible for the 23 point difference.
You say that you're puzzled that you limit could "only" be $18.5K "given the approval of many others for a second credit card at an additional $25K after less than seven months!" but I'm guessing those people don't have over half a million dollars in open tradelines. You have $18.5K of credit with NFCU, but you've noted in your post that you've never actually swiped the card. Maybe you could try product changing the Platinum to something you will use more regularly.
Denials are always super frustrating, but hang in there. Good luck! 