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w12345

Is now a bad time....

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Hello, CB.

Would anyone advise against applying for new credit (particularly credit cards) during the COVID-19 situation? I have decent scores (793 - 811 FICO), low util, solid income and a few inquiries. Wanted to apply for a couple cards in the coming weeks, but now I'm afraid that banks may be "recession/preservation mode" and may start cutting present card holders limits and rejecting new apps regardless of qualifications. Been trying to research this... and seeking knowledgable input.

 

Best,

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Seems unlikely. But what's the worst that can happen if you apply and get rejected? 

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The getting rejected part...😁

Rejections happen and we've all been there. But, being rejected because the bank is in a preemptive panic or the country is on the cusp of a recession, is a little different. I'd rather hold on that inquiry. I wouldn't mind, however, if it was somehow reduced to a soft pull due to the present climate.

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If there is a card that can benefit you, go for it. Inquiries don't matter. Banks still want to lend and card companies need to board new customers or die

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Posted (edited)
4 hours ago, hegemony said:

If there is a card that can benefit you, go for it. Inquiries don't matter. Banks still want to lend and card companies need to board new customers or die

That is a fact.

Edited by w12345
Highlighted quote.

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22 hours ago, w12345 said:

Would anyone advise against applying for new credit (particularly credit cards) during the COVID-19 situation?

Dave Ramsey would and it wouldn't surprise me if his desciples believed credit cards actually cause COVID-19.

 

It's always a good idea to increase available credit when you can. Even if an inquiry actually mattered, what would be the point of avoiding one if you're not going to app for anything?

 

My only caveat would be, be sure you can complete the MSR in your underwear. If you can, go for it. If not, you may forfeit the SUB.

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Posted (edited)

If you want/need credit, go ahead and apply. As hegemony mentioned, banks need new customers, go ahead and apply. You won't be declined because of coronavirus.

Edited by NorCalR1

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Since the Fed reduced banks' required reserve ratio to zero, nothing is stopping them from lending as much as they want.  Someday that will come back to bite us all, but it means there's no need to cut back on apps today.

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I sincerely appreciate the candid input. Since my original post, I received an email/article from EX recommending that people consider tapping into their emergency funds/coffers or apply for new credit. The best/worst news I've read on the topic to date.

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On 3/18/2020 at 11:10 PM, Sidewinder said:

If you're willing to bet that you could get rejected with a 793, I'll take it.

 

HAHA true, but I could name a few places that might deny someone with that high of a score. Comenity, PenFed, US Bank, FNBO, Cap1 (for their "excellent" credit cards), and even Apple/Goldman Sachs.

 

In the age of data driven credit, they are finding fun new ways to deny people! Your Innovis, Sagestream, Chexsystems, LexisNexis, FactorTrust, and other smaller bureau reports are definitely something worth monitoring if you aren't already. 

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On 3/24/2020 at 2:27 AM, RehabbingANDBlabbing said:

HAHA true, but I could name a few places that might deny someone with that high of a score. Comenity, PenFed, US Bank, FNBO, Cap1 (for their "excellent" credit cards), and even Apple/Goldman Sachs.

Really? Crap! PenFed was one fo the cards on my short/to-do list. 🥺

 

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16 hours ago, hegemony said:

Penfed should not be on the list IMHO

Just remember their history of denying people for their Egyptian ways (i.e. people with high credit lines to compared to their incomes "pyramiding" debt).

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1 hour ago, RehabbingANDBlabbing said:

Just remember their history of denying people for their Egyptian ways (i.e. people with high credit lines to compared to their incomes "pyramiding" debt).

YMMV. It isn;'t 2003 anymore.

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18 hours ago, hegemony said:

Penfed should not be on the list IMHO

Not to come off sappy, but your opinion means a great deal, Hegemony. That said, would you mind elaborating a bit more? Just looking for 2-3 decent cards/limits, preferably with rewards/miles, to add to my profile. Per my limited knowledge on the landscape, I had it previously narrowed down to: PenFed and an AMEX and Wells Fargo product. 

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Posted (edited)
53 minutes ago, w12345 said:

Not to come off sappy, but your opinion means a great deal, Hegemony. That said, would you mind elaborating a bit more? Just looking for 2-3 decent cards/limits, preferably with rewards/miles, to add to my profile. Per my limited knowledge on the landscape, I had it previously narrowed down to: PenFed and an AMEX and Wells Fargo product. 

Well IMHO Penfed's cards are mostly ho-hum these days both in terms of the earning rewards and the redemption rate. There is also a disappointing 50k max across card products (although for years I was over this until last year when they fixed the glitch). The whole Penfed turns people down for "pyramiding debt" that was something that happened to CW's back in the day but it has been years since I've seen such a claim.

 

Of the three issuers you list, amex has the best options unless your spending patterns would favor a product from wells or penfed. Last time I look at wells products I was underwhelmed.

 

My point about penfed above is merely it should not necessarily be listed with FNBO, us Skank, and the others since we have not seen many (any?) reports of Egyptian adverse action in the past decade.

Edited by hegemony

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That's great information-- thank you.

And, admittedly, Wells Fargo was a bit underwhelming at first (and second) glance. They gave me $5k via Luna Flooring several years back. I only used about $2k for new carpeting in my house and I paid it off five months later... its been sitting ever since, so I figured I'd asked them for a "real" card. Full disclosure: I was looking to modestly add an additional $10-$12k (between 1-3 cards max), then go back into hibernation for a year or two. I'm presently at just under $34k (small potatoes, I know) and 24% util.... mainly due to one card hovering at about 60% (Citi/BestBuy). Went on a bit of a spree for flat screens, a few gaming consoles and other gadgetry for an after school center I own.  

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Update: Apparently, it is a bad time after all.

Denied three (3) out of three (3) times. Official FICO 8 Scores: 817 (EX), 803 (EQ), 801 (TU) as of 04/02. Also denied CLI for Discover utilizing the love button. Perfect payment history. 24% utilization. $90k+ inc. Back in the cavern I go.... 

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3 hours ago, w12345 said:

Update: Apparently, it is a bad time after all.

Denied three (3) out of three (3) times. Official FICO 8 Scores: 817 (EX), 803 (EQ), 801 (TU) as of 04/02. Also denied CLI for Discover utilizing the love button. Perfect payment history. 24% utilization. $90k+ inc. Back in the cavern I go.... 

Which 3 did you apply for? 

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8 hours ago, w12345 said:

24% utilization.

Under the current circumstances I would bet that this is a major factor for the denials.

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12 hours ago, w12345 said:

Update: Apparently, it is a bad time after all.

Denied three (3) out of three (3) times. Official FICO 8 Scores: 817 (EX), 803 (EQ), 801 (TU) as of 04/02. Also denied CLI for Discover utilizing the love button. Perfect payment history. 24% utilization. $90k+ inc. Back in the cavern I go.... 

How many cards and, of those, how many with a balance?  People too often ignore this component of utilization...and as CV aptly notes, 24% is high in the current climate even if it was only on one card. 

 

Also remember that Fair Isaac Bankcard 8 is irrelevant if that is not the model being used by the lender with whom you have applied. 

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It's not necessarily a bad time to apply. But banks are understandably nervous and you spooked them.

 

60% on one card + 24% overall + credit seeking behavior adds up to a red flag.

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17 hours ago, RehabbingANDBlabbing said:

Which 3 did you apply for? 

 

I'm curious about this as well. 

 

Just a side comment:  In OP's shoes, I would have started with a CLI request on the Best Buy card and waited for any increase to report before applying for new credit.  (and if denied for the BB CLI, I would have trimmed my apps to a single, most wanted, addition).

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