Credit Card Denial with Credit Score of 789

[Anonymous]

Hi,

  I was hoping to seek some advice on improving my credit score. I recently applied for a Chase Freedom Card and despite having a credit score of 789 on Transunion (the site they used). I was still denied. I was honestly baffled by this. I am curious if the reason is not having bad credi, but rather a lack of credit. I am 29 years old and unti this point have only held a few store credit cards, but never applied for major credit card as I have always felt that I did not have the money to buy something then I should not buy it. I have steady employment (same position for close to 3 years) and make ~80K annually. The only outstanding debt I have is my student loan payments which has been reduced from 85K to 19K in the past 2 years due to early payment and loan reimbursement programs. I have never paid any of my student loan payments or my credit cards (3 opened in 2004 and 1 in 2009) late. I do not have a car payment as I saved my money and just paid cash for a 09 model. In my mind - my credit was excellent, but still recieved rejection letter. Therefore, I pulled my credit report to confirm no incorrect information was listed. It was accurate with the exception of my place of employment was not listed. Do you think that this is why I was denied. Or is it because I never applied for credit cards until I was 29. I somehow feel that I am being punished for being a responsbile college student.  Any advice would be appreciated.

PS - I was going to call the credit card, but they only accept inquires via mail. Should I even waste my time and write them a letter?

[RobertEG]

All I see is a possible "thin" credit file and low mix of credit.  With what appears to be only one open revolving acccount, and, other than your student loans, no installment credit, they may feel that they dont have sufficient major TL history to grant the requested card. How high a CL did you request?

You might consider starting the building of major bank cards history by going through a more consumer-friendly creditor, such as your local credit union, if you are a member.

With your apparently high scores, you should easily qualify for a bank card.  YOu might want to keep the reqested CL on the card relatively low, such as $5k or under.

With a thin credit file, and yet having scores as high as yours. your prior payment history would necessarily be excellent.

PS:  the lendor probably used a true FICO score.  I dont think the score your received is a true FICO score

[AndySoCal]

How recently have you used your store card(s)?  I presume they are paid in pull each month when you do use the card. I would disagree with RobertEG the student loans are Installment accounts.

[Anonymous]

Thank you for your feedback. I am unsure of how much CL I applied for as I simply clicked on the Chase Freedom Card without spefication to CL. Perhaps, I will take your advice and do a credit card via my credit union. Also, would you be able to enlighten me between a true fico score and the number that I would receive. I am not familar with the difference.

[Anonymous]

I use my JCPenneys card 5 to 6 times yearly and my Old Navy about the same. The other two cards are used less often as they do not have stores in the area in which I live. All cards are paid in full at the end of each billing cycle. I have never paid interest on any of my purchases. Certainly appreciate your feedback!

[MarineVietVet]

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@AndySoCal wrote:

How recently have you used your store card(s)?  I presume they are paid in pull each month when you do use the card. I would disagree with RobertEG the student loans are Installment accounts.

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What type of accounts would you call them if they are not installment loans?

ETA: I misread your post and I think you misread Robert's.  I believe he was saying that apart from the student loans there are no other installment loans. I apologize for my error.

From a BK years ago to:
EX - 9/09 pulled by lender 802
EQ - 7/06-663, 3/10-800
TU - 8/10-772
You can do the same thing with hard work

[AndySoCal]

Where Robert states no installment accounts that is what I was disagreeing with. Excuse my confusion

[Anonymous]

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@Anonymous wrote:

Hi,

  I was hoping to seek some advice on improving my credit score. I recently applied for a Chase Freedom Card and despite having a credit score of 789 on Transunion (the site they used). I was still denied.

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As Robert alluded to, the score you found on the TransUnion website is a Vantage score, which is based on a scoring model with a range of 500-990. It is not a Fico-based score, and is commonly referred to as a "Fako" score.

There are dozens of credit scoring models. The scores predominantly used by lenders are Fico score variants and the main Fico scoring models have a range of 300-850. Accordingly, a Vantage score will tend to be much higher than a Fico score based on the same credit report.

The credit reporting agencies and credit monitoring services offer various non-Fico scores, such as Vantage, Plus, and TrueCredit, and purposely try to confuse people by referring to all of these as "your credit score" as if everyone has a single score.

The score that your denial may have been based on was most likely a Fico score (or a proprietary bank score that was built on a Fico score) in the ballpark of 650. Also, these days, it's not unusual for paranoid banks to deny an application because of specific credit report factors (too many inquiries or new accounts within a certain timeframe, existence of an interest-only mortgage, paydown progress of other credit card accounts, etc.) regardless of how good the credit score is ...

[MattH]

As others have said, the score you mention was probably not your actual FICO score but what we call a FAKO because many companies market such scores in ways that are highly deceptive.  The recent financial reform laws that will take effect in 2011 includes a provision requiring lenders to provide better disclosure to applicants of their reasons for making the credit decisions they make; time will tell whether this provision will improve matters or just make lenders look harder for loopholes.

If I were you I would purchase my actual TU and EQ scores from myfico.com and study the reports closely.  Also, once you have purchased a score here you can use the Simulator to look at possible ways to improve your score.

If you don't want to pay for your FICO scores, you can get a pretty good idea from the Estimator here:

http://www.bankrate.com/calculators/credit-score-fico-calculator.aspx

Even if you do purchase a FICO report here and use the Simulator, further experiments with the Estimator can be interesting and worthwhile because the Estimator allows for a wider range of scenarios than does the Simulator.

So in your shoes I would do the following now:

1. purchase at least one FICO score report here at myfico

2. spend 30 minutes fiddling around on the Simulator

3. spend 30 more minutes fiddling around on the Estimator

4. re-post here with specific questions based on what you learned from steps 1, 2, and 3.

In this way, you will have very focused questions that would likely yield high value answers.

Good luck!