How Do Credit Card Approvals Work?

[Cjethompson2017]

Ok, this seems like an odd question, but my husband and I went through a period where we had charge offs and things in collections. Since then we've paid off all charge offs, and removed all collections. It's really been a really long time since either of us have applied for a credit card. How does this work? Lol. What scores do they typically look at? I don't want to have a hard hit if our scores aren't anywhere close to where they need to be.

We are navy fed members, so I'd like to start there since so many people have great things to say about them. Can we apply for a regular unsecured card, and if we get denied can we immediately go into a secured card? Also, do my husband and I apply together? 

We are also looking at purchasing furniture from living spaces, and a sleep number bed from the sleep number store. We'd like to put that on credit as well. 

Any help is appreciated! Thanks!

[Anonymous]

I think you would need to put more data points up for people to be of better help with your question.  all 3 credit scores, income, how old are the charge offs, etc...   I am with NFCU also and they are pretty good about giving cards to members that they have a relationship with.  Although from my expereience they tend to give you a lower starting limit at first and then they give the bigger SL for the 2nd card.  It will be a hard pull from them when they do it also.  

[Cjethompson2017]

Which fico version do they use? Or most credit card companies use? I'm still learning, so all these different versions is a bit confusing to me. 

My charge off is from 2014. I'm currently trying to see if they'll be nice and grant an early deletion. My husbands, on the other hand, are from 2017. But, they are all paid. 

[AllZero]

For a start, you'll want to pull your own credit report to gauge your creditworthiness.

$1 you can obtain your 3 bureau FICO 8 scores and reports at Experian or CreditCheckTotal (part of Experian). Cancel in 7 day or less to avoid the re-occurring monthly charge. Wash, Rinse, and Repeat as needed.

AnnualCreditReport. Free weekly 3 bureau online reports through April 2021.

Free credit reports (disregard the VantageScore 3.0 score) at:
Credit Karma for weekly TU and EQ reports.
WalletHub for daily TU report.

[Cjethompson2017]

@AllZero I am more wondering what the credit card companies consider good, I guess? I have all my scores. I have the highest membership with myFico, I also have my free membership with Experian, and I have credit karma and credit sesame. MyFico shows several different versions of fico scoring, and they're all a little different. 

I realize I don't have the best credit yet, but I'm wondering where I should be before I even consider applying for credit.

[Anonymous]

@Cjethompson2017  If i remember correctly they pulled my TU.  At the time my scores were FICO8 687, 9- 683, 9 bank card 704.  I was able to get a 20k limit but it was my second card with them.  My first card was only at 1k SL.  I apped for a CLI on the first card and they upped it to 3k.  

[Anonymous]

@cjethompson could you post your scores if you have them so people can get a better gauge on what you are working with?

[longtimelurker]

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@Cjethompson2017 wrote:

@AllZero I am more wondering what the credit card companies consider good, I guess? I have all my scores. I have the highest membership with myFico, I also have my free membership with Experian, and I have credit karma and credit sesame. MyFico shows several different versions of fico scoring, and they're all a little different. 

I realize I don't have the best credit yet, but I'm wondering where I should be before I even consider applying for credit.

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Different companies will have varying requirements, and within a company some cards will require higher scores than others.   As for which scores, generally FICO 8 or 9 will be  a good benchmark.  Some issuers will use other versions including Bankcard but if you tell us your FICO 8/9, we can give some idea of possibility of success!

[AllZero]

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@Cjethompson2017 wrote:

@AllZero I am more wondering what the credit card companies consider good, I guess? I have all my scores. I have the highest membership with myFico, I also have my free membership with Experian, and I have credit karma and credit sesame. MyFico shows several different versions of fico scoring, and they're all a little different. 

I realize I don't have the best credit yet, but I'm wondering where I should be before I even consider applying for credit.

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Each lender has their own requirements. Here is a good resource on The "Which Banks Pull Which Report For Apps" list

For Navy, new CC applications are HP on TransUnion. TU9 I think? They have been know to use EQ too.

Navy does have a prequal tool. If you call in and speak with a CSR, they may be able to advise if you pre-qualify. The online prequal tool does not appear to be accurate. Score is a factor but it is not the driving force with them. They will look at your income, DTI Debt To Income.

For your reading pleasure. Navy Federal Thread for CLI and Additional Cards

[Aim_High]

@Cjethompson2017, as mentioned, without more data points about your profile or the cards you are considering, it's hard for us to be more helpful.  As @AllZero mentioned, knowing all your scores is a start.  Then you can check this thread* on My Fico which shows which credit reporting bureaus are normally pulled by which lender.

*https://ficoforums.myfico.com/t5/General-Credit-Topics/The-quot-Which-Banks-Pull-Which-Report-For-Ap...

Once you have a particular lender and even a particular card in mind, using the search function within My Fico to seek out previous threads is a great place to start.  You will find who got approved or denied for a particular card and may find helpful data points to compare such as derogatory information, inquiries, and credit scores. 

There is no single score that we can tell you is "good enough."  Lenders use a combination of not only scores but also income, debt-to-income, and may look at information such as late payments or collections.  And the underwriting from one card to another from the same bank much less between different lenders can vary substantially!   (See this thread* where I just discussed the hierarchy of cards.  Generally speaking, the farther "up the ladder" you go, the higher the hurdle in underwriting you'll need to be able to pass.)

*https://ficoforums.myfico.com/t5/Credit-Card-Applications/Wells-Fargo-Propel-Denied/m-p/6097389#M272...

Before you apply, put out a new posting with all the above information and we can tell you more precisely if that would be a wasted application based on your profile and the lender.

All of that said, lending across most banks has tightened considerably since the coronavirus pandemic started.  So keep in mind that what someone got approved for six months ago may no longer bear the same weight. 

Good luck and let us know what else we can do to help!