I was declined about an hour after submitting the app. The CLI was declined for the following reasons.
- Income insufficient for amount of credit requested.
- MUST ESTABLISH SATISFACTORY PENFED REPAY PRIOR TO ADDITIONAL CREDITBEING GRANTED.
- Sufficiently obligated with unsecured indebtedness.
Income insufficient for amount of credit requested: I was quite surprised when I saw this. In fact, probably the most surprising reason for the decline! I have never been told this reason before from any lender! I was curious, so I did a Google search and couldn't dig up much on this. I did find a couple of threads about this on another forum, but neither of them disclosed their income. However, one seemed to be in college (same age group as me, so I imagine low income as well). I find it strange, because I didn't request an amount (Note: credit requested) but I think that was a generic 'scripted' reason. But PenFed is an extremely conservative lender and I honestly feel that this reason was 'unfair' if you will. If income is insufficient, then why would have they approved me for $3,000 in the first place? Oh well, I certainly won't hold this against them and I will apply for a CLI in the future. If I receive this reasoning again, then I will wait and proceed until I earn a higher income.
MUST ESTABLISH SATISFACTORY PENFED REPAY PRIOR TO ADDITIONAL CREDITBEING GRANTED: I'm slightly surprised with this. I have seen cardholders get approved for a CLI within the first 3 months. One myFICO member requested it before the card arrived, another myFICO member was approved a month after acquiring the card, there was also a myFICO member who was approved right before the cutoff when requesting a CLI results in a HP. I know, I know, I have a thin file and maybe these members had thicker files with more payment history from other lenders. Maybe having a thicker file of on-time payment history with other lenders negates this reasoning. Strangely enough, I Googled "MUST ESTABLISH SATISFACTORY PENFED REPAY PRIOR TO ADDITIONAL CREDITBEING GRANTED" and couldn't find anything. I mean anything! I believe this is extremely rare, however I also believe I was borderline approval/decline territory when I originally acquired this card.
Sufficiently obligated with unsecured indebtedness: This doesn't surprised me at all. It's a well known fact that PenFed views all new accts. as debt. With a quick Google search, you will see this reason come up many times. If PenFed views new accts. as 6 months or less, then PenFed sees me as having $9,000 in debt. If they view new accts. as being a year or less, than PenFed sees me as having $16,500 in debt. This is definitively the case here, as I'm only at 5% total UTL and <1% for the PenFed Promise Visa. This reason makes the most sense, because as I said before. I was extremely surprised to get approved with having many new accts. I originally thought this would have been a 'dealbreaker' when I first acquired the card.
I know this is a long post for a decline, however I wanted to share so that others can use these as 'data points' if necessary. Especially since a couple of these reasoning's are rare from what research has shown. I'm not at all upset that I was declined the CLI. It was a SP from the original HP when I acquired the card, so I had nothing to lose here. I was personally on the fence as I didn't have any expectations and I honestly don't blame them at all. I don't agree with the first two reasoning's, but I do agree with the last one since this is quite common with PenFed's conservative lending. I will give this another try in the future perhaps.
Must garden until 2/1/2022 to hit my goal AAOA. 