FICO Scores in 800s Don't Guarantee Approval

Anonymous · ‎07-20-2018

We all know that good FIC0 scores by themselves are not a guarantee of approval, and I'm the latest example of that. I have large credit lines acquired before retirement and my current revolving is at 12% utilization. I have large medical expenses and depression spending now a thing of the past which are being paid off while current charges are going on pay in full cards. I have a car loan at 2% and a Lending Club loan at 5.99%. The cards on which there are balances are at 11.74% soon to be 11.99% thanks to the Fed rate hikes.

According to the boxes on the credit card statements, I could pay those cards off in 3 years but it would be easier if I could get a low rate personal loan like some are doing here. I do know that my card rates are low compared to some, but money saved is money saved so I began the soft pulls aided by my knowledge of my scores and the fact I have never missed a payment in my life as well as paying far above the minimums.

Marcus immediately denied me because of having too much unsecured credit which is the $15,000 Lending Club loan at 5.99%. There were some that would consider me beginning with So-Fi at a rate 5% higher than my cards, as well as one at 18%. Duh! It doesn't take a mental genius to determine that these were not really beneficial.

I have Equifax's Score Watch simply because this area loves Equifax. On its rate quote box based upon my latest score, I saw a rate that was very tantalizing and would be from traditional banks. I gathered my materials and went to the local bank. I left with a loan at 4.75% which I can easily pay off in 3 years because of the savings plus leave me with extra money to pay Lending Club down.

Now, the interesting thing about my local bank is that it reports only to Equifax so when all this revolving credit is paid off, the loan from the bank will not show up on TransUnion or Experian. This does not give me permission to spend freely as I have a budget but there are times that one should not overlook the local sources of help. Needless to say, this 4.75% loan is something to celebrate and thankful to the local people who supported me. Yes, the 4.75% is secured but that doesn't bother me as my history indicates that I will not be missing a payment while having excess to use as needed.

OldFatJarhead · ‎07-20-2018

Out of curiosity since you mentioned retirement: Do you have income? If so, what's your debt to income ratio? (total of your monthly minimum payments divided by your gross monthly income)?

Anonymous · ‎07-21-2018

@OldFatJarhead wrote:
Out of curiosity since you mentioned retirement: Do you have income? If so, what's your debt to income ratio? (total of your monthly minimum payments divided by your gross monthly income)?

Retirement income is $61,000 a year gross on last year's income tax return, and this year is running about the same. I am obligated to a minimum payment of $1221 for the loans and cards but have always paid more on the cards and sometimes extra on the loans. Total revolving credit lines is $154,000 which is far more than needed. I can easily live on one retirement check and pay more than minimum financial obligations with the other one. I track expenditures on spreadsheet. From a creditor's standpoint, the income is not enough to support the current total revolving credit lines plus loans should I go on a spending spree.

Anonymous · ‎07-21-2018

Midnight2 ... interesting you mention more credit than you need. In the same place. Also, based on comments and an informal AR with US Bank that reduced my CLs with them I had more credit than my annual income by several times. US Bank was very professional and respectful about lowering my credit but did knock it back and at least I do not have more in CLs than my annual income. In truth ... I had a hard time justifying my total credit card CLs across all lenders. Closed eight cards and dropped more than $60K in CLs and still can't use all of it. Get your comments and they strike home

Anonymous · ‎07-21-2018

@Anonymous wrote:
Midnight2 ... interesting you mention more credit than you need. In the same place. Also, based on comments and an informal AR with US Bank that reduced my CLs with them I had more credit than my annual income by several times. US Bank was very professional and respectful about lowering my credit but did knock it back and at least I do not have more in CLs than my annual income. In truth ... I had a hard time justifying my total credit card CLs across all lenders. Closed eight cards and dropped more than $60K in CLs and still can't use all of it. Get your comments and they strike home

Dinosaur---I have 8 cards acquired over the years. I haven't gotten a new card since 2001 as it wasn't needed. The card companies kept increasing my credit lines until retirement with exception of one who gave me a $2000 increase in recognition of never missing a payment. I have two cards that are my favorites, one of which is paid in full each month and has over $1200 in cash earnings that I plan to use on a trip next year. Three of the cards with huge credit lines are rotated to keep active and paid in full when used. The rest are what are being paid off. I got tired of chasing zero balance transfers with those card companies. Just got two in the mail today.

I see people's signatures filled with cards. I find it a nuisance to keep 8 cards active; more than that would be a major pain. I've not been threatened with a credit line decrease but if it happens, then I may protest as I like having them for emergency purposes despite having an emergency fund. When one med alone is over $800 out of pocket a month, you quickly learn how to budget. Thankfully, that appears to be in the past but one never knows what lies ahead. When it is said that many bankruptcies are a result of medical expendititures, it is hard to comprehend that unless experiencing it. Right now, one card and one as a backup are sufficient but I'm not telling the card companies that as I want to keep the credit lines.