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PenFed Overdraft LOC...?

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Charmante
Frequent Contributor

PenFed Overdraft LOC...?

Okay... So I just joined PenFed (after recommendations on this forum to do so). I am actively REBUILDING my credit.

 

Well PenFed DENIED my Credit Card application BUT Approved me for an Overdraft LOC...

 

1) Why deny the CC? They are essentially the same?

 

2) Does the Overdraft LOC report to all three credit agencies?

 

3) Does the Overdraft LOC offer Credit Limit Increases?

3A) Automatic or I need to ask?

3B) Do I have to use it to increase it or can it sit idle and grow?

3C) How long should I let it age before increasing?

 

4) May I use it without overdrawing my Checking account? I hate the idea of going negative on purpose, unnecessarily, just to be able to make payments on the Overdraft LOC... Smiley Sad

 

5) Will this help me qualify for a PenFed AUTO LOAN, PLOC, and Credit Card in the future?

5A) How long should I age the Overdraft LOC before asking for other products?

 

Thank you guys so much! Because of all you guys' advice, my credit score INCREASED by 22 points in March! Smiley Happy

Message 1 of 9
8 REPLIES 8
outofcredit
Established Contributor

Re: PenFed Overdraft LOC...?


@Charmante wrote:

Okay... So I just joined PenFed (after recommendations on this forum to do so). I am actively REBUILDING my credit.

 

Well PenFed DENIED my Credit Card application BUT Approved me for an Overdraft LOC...

 

1) Why deny the CC? They are essentially the same?

 

2) Does the Overdraft LOC report to all three credit agencies?

 

3) Does the Overdraft LOC offer Credit Limit Increases?

3A) Automatic or I need to ask?

3B) Do I have to use it to increase it or can it sit idle and grow?

3C) How long should I let it age before increasing?

 

4) May I use it without overdrawing my Checking account? I hate the idea of going negative on purpose, unnecessarily, just to be able to make payments on the Overdraft LOC... Smiley Sad

 

5) Will this help me qualify for a PenFed AUTO LOAN, PLOC, and Credit Card in the future?

5A) How long should I age the Overdraft LOC before asking for other products?

 

Thank you guys so much! Because of all you guys' advice, my credit score INCREASED by 22 points in March!


 If you have the standard OD LOC that is attached to an Access America checking account rather than the free standing CLOC then this is what I have experienced:

1. Not really the same as a CC it can only be accessed via your checking account.

2. Yes, it reports on the 30th of the month like a revolving line of credit.

3. Yes, you can get a cli by basically applying again under the same checking account asking for an increased amount.  I'm sure it will most likely be a HP.  I have never re-applied myself. Maybe someone else will chime in with a more definitive answer.

3A.  Need to ask.  I've never received an automatic increase.

3B.  No idea as my limit has remained the same for 3 plus years whether used or not.

3C. Again, not sure but be prepared for a HP.

4. Only way to use it is by overdrawing your checking account.  No separate checks are issued for the OD line connected to the Access checking.  They do offer the standalone CLOC that comes with it's own checks and can be used without overdrawing a checking account.

5. and 5A.  No idea, I don't have any other credit products with Penfed and since their underwriting tends to be more strict I have never applied for anything.  YMMV


Instead of waiting for the storm to pass, I've learned to dance in the rain.
Message 2 of 9
Charmante
Frequent Contributor

Re: PenFed Overdraft LOC...?

What is a CLOC?

Message 3 of 9
outofcredit
Established Contributor

Re: PenFed Overdraft LOC...?

Sorry, CLOC is "Checking Line of Credit" but Penfed calls their standalone product that comes with separate checks their  "Fixed Rate Personal Line of Credit."  Sorry for the misnomer and any confusion.


Instead of waiting for the storm to pass, I've learned to dance in the rain.
Message 4 of 9
Charmante
Frequent Contributor

Re: PenFed Overdraft LOC...?

So how do I know which product I have and if I over-draw on purpose (to use the ODLOC) won't that Negatively affect my standing with PenFed?

Message 5 of 9
outofcredit
Established Contributor

Re: PenFed Overdraft LOC...?

You could call to verify which account you have.  If the overdraft line opened automatically with your Access checking account then it is most likely not the standalone Personal Line of Credit.  Also, if it was the standalone product you would have received a separate set of checks to use with it. Don't know how Penfed views customers who use it.  I personally use whatever is available to me creditwise if I need to without worrying how the creditor views me.  I do strive to be responsible with my credit but my mindset at my current advanced age is that if they didn't want me to use it, they shouldn't have given it to me.  I have no big credit goals of houses, cars or travel.  I'm retired, no major purchase plans and my adult children use my cards more than I do.  They all have great jobs and are saving their "credit images" as they do have future major credit goals.


Instead of waiting for the storm to pass, I've learned to dance in the rain.
Message 6 of 9
Namaste7
Established Contributor

Re: PenFed Overdraft LOC...?


@Charmante wrote:

Okay... So I just joined PenFed (after recommendations on this forum to do so). I am actively REBUILDING my credit.

 

[...]

5) Will this help me qualify for a PenFed AUTO LOAN, PLOC, and Credit Card in the future?

5A) How long should I age the Overdraft LOC before asking for other products?

 

Thank you guys so much! Because of all you guys' advice, my credit score INCREASED by 22 points in March! Smiley Happy


Paying the CLOC create internal credit history with PF; however, you should keep your expectations reasonable on how it will impact other credit products. Given the interest rate, I would not use for the intent to get another product. Ultimately, what will qualify you for other products is your FICO 9 score, income, debt to income ratio, and overall credit profile.

 

If you are interested in other PFCU credit products, wait at least 1 year from your youngest account or inqury, before applying for another product. PF is rebuilder friendly as long as you maintain good internal / external pay history and limit credit seeking. For some members, they can grow their credit relationship very quickly and for others it takes a longer time to expand to other products and pre-approved offers.

 

Congrats & good luck!

~~MMXX~~
2024 Goal$
2023 Goal$
FICOs 760+
Message 7 of 9
VPExecutive
Frequent Contributor

Re: PenFed Overdraft LOC...?


@Charmante wrote:

Okay... So I just joined PenFed (after recommendations on this forum to do so). I am actively REBUILDING my credit.

 

Well PenFed DENIED my Credit Card application BUT Approved me for an Overdraft LOC...

 

1) Why deny the CC? They are essentially the same?

 

2) Does the Overdraft LOC report to all three credit agencies?

 

3) Does the Overdraft LOC offer Credit Limit Increases?

3A) Automatic or I need to ask?

3B) Do I have to use it to increase it or can it sit idle and grow?

3C) How long should I let it age before increasing?

 

4) May I use it without overdrawing my Checking account? I hate the idea of going negative on purpose, unnecessarily, just to be able to make payments on the Overdraft LOC... Smiley Sad

 

5) Will this help me qualify for a PenFed AUTO LOAN, PLOC, and Credit Card in the future?

5A) How long should I age the Overdraft LOC before asking for other products?

 

Thank you guys so much! Because of all you guys' advice, my credit score INCREASED by 22 points in March! Smiley Happy


You're looking for a personal line of credit. Penfed offers those too. https://www.penfed.org/personal/personal-line-of-credit

 

You're out of luck regarding the OLOC - at least they don't charge a fee for you to use it, unlike other banks. 

Message 8 of 9
CreditInspired
Community Leader
Super Contributor

Re: PenFed Overdraft LOC...?


@outofcredit wrote:

You could call to verify which account you have.  If the overdraft line opened automatically with your Access checking account then it is most likely not the standalone Personal Line of Credit.  Also, if it was the standalone product you would have received a separate set of checks to use with it. Don't know how Penfed views customers who use it.  I personally use whatever is available to me creditwise if I need to without worrying how the creditor views me.  I do strive to be responsible with my credit but my mindset at my current advanced age is that if they didn't want me to use it, they shouldn't have given it to me.  I have no big credit goals of houses, cars or travel.  I'm retired, no major purchase plans and my adult children use my cards more than I do.  They all have great jobs and are saving their "credit images" as they do have future major credit goals.


I love your entire response. My sentiments exactly!  😁


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Message 9 of 9
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