Being denied with an 800 credit score is frustrating. Many Consumers work hard to achieve an excellent 800+ credit score. Better credit rewards through credit cards are just within reach pending an application. Upon submitting their info to the Lender, many Consumers get a letter in the mail days later - DENIED. Why? Many Lenders have modified their criteria when reviewing Consumer data for a new credit card. #HardInquiries are now an ADDITIONAL obstacle Consumers have to be aware of when applying for credit cards and loan products.
FICO scoring model is most commonly used by Lenders when evaluating Consumer credit info. Many Consumers are aware of the 10% weighted factor that Hard Inquiries make up in their #CreditScore . However, more emphasis on the importance of Hard Inquiries must now be more carefully applied, despite their influence on credit scores being just 10%.
Don't get blindsided by a denial with an excellent score. I show how it's possible to have some Lenders NOT use certain credit bureaus to pull your data along with other useful sites.
Many retail stores offer "private label" credit cards that only work at their store and nowhere else. These "starter" cards usually come with less stringent credit requirements and can be a viable option for those starting their credit journey. Comenity Bank and Synchrony Bank are two Credit Issuers that have a huge market share of these "private label" credit cards. Hard Inquiries are usually NOT as heavily weighed for these credit cards as they would be for cards with better rewards like Chase's Sapphire cards.
Credit Issuers that offer retail store cards are known to utilize more predatory credit practices like increasing interest rates immediately, or even retroactively, when Consumers have late payments. Credit Limits can be reduced without prior notice, or worse yet, even account closure.
While getting approved for "starter" cards is usually easier, there are tradeoffs as mentioned earlier. These cards have poorer rewards for Consumers and have a history of taking more aggressive actions towards Borrowers when compared to the larger commercial Lenders that offer credit cards with better rewards.
This video is more focused towards individuals that have started their credit journey but are looking to improve the rewards they get from their purchases. The impact of Hard Inquiries are examined in this video. They have become a more important credit factor beyond FICO's 10% weighted factor graph discussing credit score composition. Many Lenders have adopted their own rules beyond FICO's algorithm by imposing new account limits within certain timeframes. Examples include Chase's 5/24 rule, BofA's 2/3/4 rule, Citi's 24-mo rules, and others. More videos covering these related topics will be made soon.
For now, see Screaming Lincolns video for #CreditStrategy on what to do when Lenders reduce your Credit Limits by maintaining low Credit Utilization Ratio here:
Also see Screaming Lincolns video on FICO's newest model FICO10 here:
Then check this one on how to maintain an excellent score during an economic downturn here:
Tell me where you're at with Hard Inquiries and if it had any effect on approvals in the Comments!
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Got a question? Don't be shy! Hit me up in the Comments anytime!
What are you waiting for???
~Cap
DISCLAIMER: I have NO affiliation or agreement with any of the other Lenders or Entities discussed in this video.
DISCLAIMER: This video is for informational purposes only. Consult a licensed finance professional or credit specialist as needed.
DISCLAIMER: All information presented here has not been reviewed or approved by any of the Lenders discussed in this video.
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