Orchard Bank Logic?

[atarvuzdar]

I'm rebuilding from a lot of past mistakes, so I cannot get approved for prime cards.

So, last December, with just one Cap 1 card under my belt ($500 CL, approved 2/11) I applied for an Orchard Bank card and was denied. Main reason cited was an old collection from 2006. FICO 623 (EQ)

After being denied, I applied for a 2nd Cap 1 (approved $500, Steps to $750 in a few months) and Macy's ($100 guideline), as well as a Credit One card ($400) that I decided not to activate due to the crazy fees.

In the meantime, a new collection showed up on all 3 of my reports, my new Cap 1 and Macy's began reporting on all 3 as well, and the new inq's showed up on my various reports. FICO has been 584 (EQ) for the past 4 weeks.

I received a pre-approval email from Orchard (probably spam, but never received pre-approvals from Orchard before so I was curious) and applied with the new information listed in the previous sentence being the only changes to my CR. Instant approval for $300.

I know some people have said you can't be denied credit for having a score that is too high, but if that's not the case then Orchard doesn't make any sense. Unless they are seeing that I have more open CC's than the last time I applied and that outweighs the new negative collection?

Any thoughts on this?

[learnin113]

Wow.  That is crazy.

[FrugalRican]

You just said "Orchard Bank" and "logic" in the same statement?

Maybe you just needed to get lower scores until they felt you really could use them?

[Revelate]

Lenders change their underwriting criteria all the time, for no rhyme or reason.

There's so many different things it could've been in this case (especially with the prospective / impending sale to Cap One, I don't know where it was in the process at the time you originally applied).

That said, if my business model was lending to people who had recent issues, and someone applied with a year of clean history, I might not extend an offer to them either.  Not everyone is going to be considered a good customer for each individual lender: to wit, and this will sound laughable on the surface, I strongly suspect Orchard considers me to be a better customer than any of the 760+ FICO people on this forum; however, I'm in their target market, and those others are not.

The flipside of that is that they can get a Chase Sapphire Preferred whereas I....

[tcbofade]

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@atarvuzdar wrote:
 

I know some people have said you can't be denied credit for having a score that is too high, but if that's not the case then Orchard doesn't make any sense. Unless they are seeing that I have more open CC's than the last time I applied and that outweighs the new negative collection?

Any thoughts on this?

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First, I think that is EXACTLY what happened.  Only one CC account = too risky.

Several small ones = more experience, less risk.

...however, I also agree with the above poster...you should be VERY careful about using the words "Orchard" and "logic" in the same sentence...lol 

[atarvuzdar]

Thanks for the responses, all.

Not complaining, just confused. I'll take the new CC and use it for what it's meant to be used for--rebuilding--and just shake my head in wonderment while I garden.

[Anonymous]

It's hard to read anything logical into this.

It could have been the slight aging of a baddie.  Who knows?

Orchard was my first open CC after a BK, DH's also.  Cap One wouldn't have either one of us.

Go figure.  

[LS2982]

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@FrugalRican wrote:

You just said "Orchard Bank" and "logic" in the same statement?

Maybe you just needed to get lower scores until they felt you really could use them?

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[namvet]

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@atarvuzdar wrote:

I'm rebuilding from a lot of past mistakes, so I cannot get approved for prime cards.

So, last December, with just one Cap 1 card under my belt ($500 CL, approved 2/11) I applied for an Orchard Bank card and was denied. Main reason cited was an old collection from 2006. FICO 623 (EQ)

After being denied, I applied for a 2nd Cap 1 (approved $500, Steps to $750 in a few months) and Macy's ($100 guideline), as well as a Credit One card ($400) that I decided not to activate due to the crazy fees.

In the meantime, a new collection showed up on all 3 of my reports, my new Cap 1 and Macy's began reporting on all 3 as well, and the new inq's showed up on my various reports. FICO has been 584 (EQ) for the past 4 weeks.

I received a pre-approval email from Orchard (probably spam, but never received pre-approvals from Orchard before so I was curious) and applied with the new information listed in the previous sentence being the only changes to my CR. Instant approval for $300.

I know some people have said you can't be denied credit for having a score that is too high, but if that's not the case then Orchard doesn't make any sense. Unless they are seeing that I have more open CC's than the last time I applied and that outweighs the new negative collection?

Any thoughts on this?

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  The logic behind low/scores or questionable credit and why this is better for some lenders is this:  Consumer finance companies figured this out years ago and why they loan money to people with bad credit is that they know the borrower can't get credit any where else.  Strange?  Not really because if they want more credit they will have to pay what they owe and the interest rate is not a factor.

[Anonymous]

My EQ FICO (the only one I know for that time) was in the 650's; as was DH's.

Unless things have changed, the drop in FICO score may not be what qualified you for the Orchard.

Orchard was, btw, a great rebuilder card.  I'm a big fan!