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Leaving my job--Applying first for Credit Card(s) and a HELOC--guidance appreciated

CA_Hopeful
Member

Leaving my job--Applying first for Credit Card(s) and a HELOC--guidance appreciated

I need to rebuild my revolving credit history after losing my ONLY card, a 32-year-old account with Citibank (over a $9 charge I forgot was there while believing the card was on autopay). This resulted in a charge-off and closure of the account (super sad and frustrating). I tell that story elsewhere.

  • Presenting Issue: I need to leave my job ASAP to manage other matters temporarily
  • Before I leave my job, I want to apply for:
    • 1) One or more credit cards with me as primary cardholder, in order to re-grow my credit history
    • 2) A HELOC—Home Equity Line of Credit (jointly with my spouse) to handle home upgrades and juggle some money around. We just had our home loan refinanced to more favorable rate. 30 year term.
      • We have strong equity in the home; near double what we would apply for.

Background Info:

  • I am married and am the lower earner, despite commensurate professional education. Since marriage, have taken some typical role-based earning hits with parenting, elder care, etc. We are our in our early to mid 50s. Kids moving toward college age.
    • I say this because it is important to me to re-establish my independent “worth on paper” as much as I can before I get too old to do so!
  • My credit is good (779, Fico 9, estimated scores via bank service). Score took a hit with the charge-off/closure noted above (score was nearly 800 before that).
    • Factors currently affecting my score:
      • Loan balances to loan payments: Grad student loans that are still at their original balance because 8K of capitalized interest. Plan to restart payments following Covid payment amnesty.
      • Too many credit inquiries (probably when we refinanced mortgage about 6-8 months ago), otherwise not sure why there are any.
      • Little to no revolving credit activity (due to the above Citibank charge off/account closure and not having any other credit cards)

Questions:

New Credit Card(s) for me--which to apply for, strategy RE hard pulls, lowish personal income, and timing of job exit (an eligibility factor):

  • Before I leave job, do you have suggestions for good cards to apply for, or where to look, for example:
    • Cards with no hard credit pull? (because could those affect HELOC eligibility if around same time?)
    • Cards that would give me individual credit based on our joint earnings (for example, in case I apply after I leave my job)? (we file taxes married/joint if that matters)
    • Cards that are good reputable cards for my rebuild (my score is good, so depends on how they evaluate income—we have a pretty high joint income but I am underemployed and my income is quite low—like first-job young adult low.
    • Is there any wisdom in applying for Citi cards (brand of my 32-year card)? Like would this bolster my case if I later beg them to do a goodwill reversal of their account cancellation (a HUGE long shot). Also we have two other Citi cards in spouse's name.

Applying for Credit Card AND Heloc before leaving my job:

  • What order we should apply? Any specific considerations I may not have thought of? We were thinking:
    • Credit card(s) first because the HELOC will definitely require a hard pull and maybe the credit card would not like the HELOC being on my record, or the hard pull.
    • HELOC second per above—but probably immediately after the credit card application.
    • I don’t want to stay in my job any longer than I have to—I have to get some other life stuff done.
    • The only reason I am staying right now, other than income, is to get ready for these credit applications. Once those are done I will leave ASAP.
    • If it matters our home is right side up in terms of plenty of equity to cover the HELOC and have plenty of equity left over.

Should we try to get our credit card limits raised?

    • Best to try to do before I leave my job? Does income matter a lot?
    • If we do so, will they do a hard pull? Or, should we just ask each one whether they’d hard pull before we ask them?
    • We plan to do a family trip this year, so we’ll have travel expenses on our only travel card (who has already offered us a higher limit). We should accept the limit increase, right?? Probably a no brainer but just to be sure.

I'd appreciate your relevant thoughts or experience.

Message 1 of 11
10 REPLIES 10
KatSoDak
Regular Contributor

Re: Leaving my job--Applying first for Credit Card(s) and a HELOC--guidance appreciated

Applying and being approved for a HELOC doesn't seem like something you can do under a time constraint, depending on the lender of course.  If you need to leave your job ASAP I would tackle the HELOC and forget about adding credit cards. 

 

The reason I say this is the experience my DH and I had during the HELOC app process in late 2019. The underwriter focused on a recently acquired Chase Amazon Prime card my DH had signed up for which had a $29 charge pending. Since the card was brand new we had no statements acceptable to the underwriter. This slowed things down and became the focus of the loan processor for over a month.

 

Take advantage of the CLI you mentioned but don't apply for anything other than the HELOC before you leave your job IMO.

 

Good luck!

 

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EX FICO 9 - 770

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Message 2 of 11
Slabenstein
Valued Contributor

Re: Leaving my job--Applying first for Credit Card(s) and a HELOC--guidance appreciated

Agree about focusing on the HELOC and worrying about credit cards after.  Most major cc lenders will let you use HHI, at least if you are married and filing jointly, so unless there's a card at a small CU or something that's more important to you than the HELOC, you should be able to get what you need after leaving your job.  To answer some of your other questions:

 

1) CC's you can app for w/o an HP are very rare, but even if you found one it would still show as a new account on your reports, which, as stated above, could give the HELOC underwriter concern.

 

2) To see whether you can use joint income on an app for a particular cc, bring up the info on the income field of the app.  If there's language to the effect that you can use any income available to you to pay your bills, etc, then you can use HHI.

 

3) To recommend specific cards we would need to know more about your profile, what you are looking for in a card, and what your credit goals are.  But if you want to get an idea of what might be available to you you can check soft pull pre-approval links for various lenders: https://ficoforums.myfico.com/t5/General-Credit-Topics/Soft-pull-PREAPPROVALs-Updated-4-20-21/td-p/5... 

 

4) If the charge-off from Citi was recent or if you did not make them whole, I probably would not bother apping for a new card with them.

 

5) For CLI's, yes, you would probably want to look for ones that are SP if you're going to do them before the HELOC app.  You should basically always assume that any request for credit is going to be an HP, but if you're very concerned to raise your limits before then some lenders are pretty reliably SP (e.g. Amex, Disco) for CLIs while others are exclusively HP (e.g. Chase).  If you want to list your spouse's issuers we should be able to tell you what to reasonably expect.


Message 3 of 11
coldfusion
Community Leader
Super Contributor

Re: Leaving my job--Applying first for Credit Card(s) and a HELOC--guidance appreciated

Before you do anything you probably should go to annualcreditreport.com and pull your credit reports (it's still free) to confirm exactly what Citibank is reporting across all 3 major CRAs.     Nobody cares if an account is simply being reported as being closed by the issuer, but reporting a recent chargeoff is a big deal as it could adversely impact both odds of approvals and if approved the terms of the approval.  

 

If you in fact do have a recent chargeoff you might want to consider a single shot subscription to one of the paid services to get your FICO scores so you know exactly where you stand and not just as you put it an estimated score provided by a bank service. 



(4/2021)
FICO 8 (EX) 815 (TU) 822 (EQ) 808
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$1M+ club

Artist formerly known as the_old_curmudgeon who was formerly known as coldfusion
Message 4 of 11
CA_Hopeful
Member

Re: Leaving my job--Applying first for Credit Card(s) and a HELOC--guidance appreciated

Thanks @coldfusion for the recommendation to get my reports. That's why I mentioned the score I had was from the bank's service-- I was wondering if I should get the real thing (answer somewhat obvious, I suppose, but still good to get prompted!). Will do.

 

Also appreciate you pointing out difference between account being reported as closed by issuer vs. charged off. I don't know for sure how they reported it, so good idea to find out.


   Nobody cares if an account is simply being reported as being closed by the issuer, but reporting a recent chargeoff is a big deal as it could adversely impact both odds of approvals and if approved the terms of the approval.  

 

If you in fact do have a recent chargeoff you might want to consider a single shot subscription to one of the paid services to get your FICO scores so you know exactly where you stand and not just as you put it an estimated score provided by a bank service. 




Message 5 of 11
CA_Hopeful
Member

Re: Leaving my job--Applying first for Credit Card(s) and a HELOC--guidance appreciated

Thanks @KatSoDak for sharing your experience. Very helpful. Will wait on the CC apps! 

Message 6 of 11
CA_Hopeful
Member

Re: Leaving my job--Applying first for Credit Card(s) and a HELOC--guidance appreciated

Thanks @Slabenstein , responses below after dashes and --in italics:


@Slabenstein wrote:

Agree about focusing on the HELOC and worrying about credit cards after.  Most major cc lenders will let you use HHI, at least if you are married and filing jointly, so unless there's a card at a small CU or something that's more important to you than the HELOC, you should be able to get what you need after leaving your job.  To answer some of your other questions:

 

--Thanks, good to know. Will wait to apply for CCs until after HELOC.

 

1) CC's you can app for w/o an HP are very rare, but even if you found one it would still show as a new account on your reports, which, as stated above, could give the HELOC underwriter concern.

 

--Appreciate that. Didn't realize the new account could be an issues. But now that you both say that, it rings a bell. They's see us as a higher risk if they think we are suddently hoarding credit.

 

2) To see whether you can use joint income on an app for a particular cc, bring up the info on the income field of the app.  If there's language to the effect that you can use any income available to you to pay your bills, etc, then you can use HHI.

 

--Great tip, Thanks.

 

3) To recommend specific cards we would need to know more about your profile, what you are looking for in a card, and what your credit goals are.  But if you want to get an idea of what might be available to you you can check soft pull pre-approval links for various lenders: https://ficoforums.myfico.com/t5/General-Credit-Topics/Soft-pull-PREAPPROVALs-Updated-4-20-21/td-p/5... 

 

--Thanks, just saw this link today. Will review. As for credit goals, I don't actually know for sure. Other than establish credit to have financial flexiblity for necessary life events or purchses. Is there a place here in forums where people specifically state or discuss their goals? Or is that surmised from the myriad questions people ask? Would be good to see examples to help clarify my own goals.

 

4) If the charge-off from Citi was recent or if you did not make them whole, I probably would not bother apping for a new card with them.

--It was in the last year. They closed -- and zeroed out-- the account so there was no clear way to make them whole. Should I call them and specifically ask to pay them back? If I do that, should I simultaneously ask for a pay-for-delete?

 

5) For CLI's, yes, you would probably want to look for ones that are SP if you're going to do them before the HELOC app.  You should basically always assume that any request for credit is going to be an HP, but if you're very concerned to raise your limits before then some lenders are pretty reliably SP (e.g. Amex, Disco) for CLIs while others are exclusively HP (e.g. Chase).  If you want to list your spouse's issuers we should be able to tell you what to reasonably expect.

 

--We don't need the CLIs for anything but better utilization numbers. Well, that and some money to use if we need it. But we don't need it right now. Mostly use cards for very occassional travel.

 

Spouse's cards, in case anyone wants to comment on them or whether they do HPs for CLIs, or whether we should ask for CLIs:

Barclays Arrival + (12, 500 limit, but 4,500 current balance--- I will pay it off this month)

Citi Dividend (9,700 limit, $0 bal)

Citi Simplicity (13,100 limit, $0 bal)

 

 


 

Message 7 of 11
Slabenstein
Valued Contributor

Re: Leaving my job--Applying first for Credit Card(s) and a HELOC--guidance appreciated


@CA_Hopeful wrote:

@Slabenstein wrote:

 

...

 

3) To recommend specific cards we would need to know more about your profile, what you are looking for in a card, and what your credit goals are.  But if you want to get an idea of what might be available to you you can check soft pull pre-approval links for various lenders: https://ficoforums.myfico.com/t5/General-Credit-Topics/Soft-pull-PREAPPROVALs-Updated-4-20-21/td-p/5... 

 

--Thanks, just saw this link today. Will review. As for credit goals, I don't actually know for sure. Other than establish credit to have financial flexiblity for necessary life events or purchses. Is there a place here in forums where people specifically state or discuss their goals? Or is that surmised from the myriad questions people ask? Would be good to see examples to help clarify my own goals.

 

Establishing credit is a perfectly cogent goal!  The main thing to keep in mind is that there are so many different credit cards out there that you could app for, so you want to be deliberate and app for ones that you'll get some benefit from and that you can keep in your profile long-term.  You'll want to know exactly how that closed Citi card is reporting before proceeding, since whether or not you have a recent charge-off is going to majorly effect what kinds of cards are open to you, but a 779 F9 seems high for that, so it may be that the card is only reported as closed by credit grantor, as @coldfusion suggested. 

 

As far as issuers you could look at, I think Discover is always a good one to try if you're early in building your profile.  They're pretty open to thin files, they have a pretty reliable softpull prequal link to check your app chances, and two of their options are decent cards that could have a role in a wallet long-term: It Cashback for 5% rotating categories or It Miles for 1.5% cashback on all purchases.  (The Chrome I'd avoid, since its rewards structure is easily beaten by other cards.)  If you have a way in to membership, Navy Federal is very popular here, can grow to really healthy limits, and has some good options for rewards structures.  The other things I can suggest are:  1) Looking for a good all-purpose card.  There are plenty of 1.5% base cb cards out there, some 2% cards, and even a few 3% cards.  2) Looking at your budget and working out what categories are your highest spend areas and then researching cards that could get you 3%+ back on those categories.  All this, ofc, is assuming that the Citi line isn't reporting as a major derog, but w/ a FICO9 of 779 on one of the bureaus I expect that your FICO scores in general are probably high enough for most cc apps.

 

One thing that can be tempting early on is to get a bunch of store cards since they're relatively easy approvals and most can grow to fairly large limits without much effort, but I'd avoid that route since it's not really a stable base for a profile and the use case for most store cards is pretty limited.  Store cards are fine to have, ofc, but, just like bankcards, you only really want to get them if they're actually going to serve a purpose in your wallet.

 

4) If the charge-off from Citi was recent or if you did not make them whole, I probably would not bother apping for a new card with them.

--It was in the last year. They closed -- and zeroed out-- the account so there was no clear way to make them whole. Should I call them and specifically ask to pay them back? If I do that, should I simultaneously ask for a pay-for-delete?


Like @coldfusion said, you'll want to pull your actual ACR's and see how the Citi card is reporting.  If it's "closed by credit grantor" and showing nothing negative, you're probably good to go.  If it is showing as a chargeoff there's not much you can do about that now other than pay it so it stops updating.  Generally, creditors do not offer pay-for-delete for charge-offs.  I missed the part in your original post where you said the amount that cause the closure was $9, so I don't know that we're really talking about "making them whole" anymore, but however the account is reporting you could still call them and make sure you don't have any outstanding owed amounts associated with the account.  If you do and assuming it's still small, I think you might as well pay it if you want Citi cards in the future.

...

 

Spouse's cards, in case anyone wants to comment on them or whether they do HPs for CLIs, or whether we should ask for CLIs:

Barclays Arrival + (12, 500 limit, but 4,500 current balance--- I will pay it off this month)

Citi Dividend (9,700 limit, $0 bal)

Citi Simplicity (13,100 limit, $0 bal)

 

I don't know either of these lenders CLI policies, unfortunately.  Hopefully someone else can answer!


 


 


Message 8 of 11
W261w261
Regular Contributor

Re: Leaving my job--Applying first for Credit Card(s) and a HELOC--guidance appreciated

Since you love to write, search on here for Goodwill or GW campaigns. Some people send 100 letters. Some are successful. 

Message 9 of 11
KLEXH25
Valued Contributor

Re: Leaving my job--Applying first for Credit Card(s) and a HELOC--guidance appreciated

Some very good points and advice given above. The only thing I haven't seen touched on is who will you be applying for the HELOC with? If it's a bank or credit union with whom you have an established relationship, you may want to consider one of their credit cards (if it's not CITI). You may even be able to apply for the card with the same pull done for the HELOC. Credit unions especially have some very low interest rates compared to the larger banks.

 

As far as types of cards, there's cashback to consider if you're comfortable using it for every day purchases like groceries or gas. I think a flat 1.5% - 2% card would be good for you. Or travel rewards, since you like to use your cards for trips. Regardless of what you decide, I think it's important to diversify and have at least 2-3 cards so that you're not at the mercy of one bank's whims. I personally would be mad at Citi for terminating a 30 year relationship over $9.





Message 10 of 11
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