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Credit slashed


By mrcharlesecurry   Follow   Sat, 24 Mar 2012, 11:15pm PDT   9,809 views   85 comments
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Both of my brother-in-laws got loan modifications and knowing that I had excellent credit and they did not I was upset that they both now had better interst rates then me. I am at 4.5% and they are both now below that.  Out of curiosity I called my bank, Wells fargo, to see if I might be eligible for a loan modification even though my wife and I both have jobs and have always made our payments on time and were expecting to continue to make our payments on time.  I thought i had nothing to lose by calling Wells. A couple of weeks after calling Wells fargo to inquire about a loan modification I then received four letters from Chase all stating that my credit limits on my four Chase credit cards where being slashed.  One credit card 's credit limit was slashed from $30,000 to $1000. another card went from $17,500 to $1,000. I was left with the belief that my inquiry to Wells Fargo about a loan modification had resulted in my credit with Chase being drastically cut. My other two credit cards with Chase where slashed down to their present balances. Any thoughts?

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B.A.C.A.H.   Sun, 25 Mar 2012, 9:05am PDT   Share   Quote   Permalink   Like   Dislike     Comment 46

xeno,

seems like there is more to the story.

If s/he was such a prudent investor/borrower etc. like s/he says, then credit card companies will race to extend ("congratulations"!) credit and credit limits.

elliemae   Sun, 25 Mar 2012, 9:14am PDT   Share   Quote   Permalink   Like   Dislike     Comment 47

mrcharlesecurry says

Plus I wasn't part of the gang that took loans they could not afford. I was always behaving coservatively and properly and now people like you ridicule people like me for doing a good job and you mock me for asserting that people like me are also deserving.

FYI, I'm a girl.

I just don't see the problem... you're upset because you don't qualify for a loan modification that you don't need? You can live for free for awhile, too. All that you need to do is stop paying your mortgage payment.

bubblesitter   Sun, 25 Mar 2012, 9:16am PDT   Share   Quote   Permalink   Like   Dislike     Comment 48

mrcharlesecurry says

I thought things where much worse in 2008. How are things worse now?

Unless you can't see it. Housing is lot worse in 2012 then 2008. Study the numbers for yourself.

B.A.C.A.H.   Sun, 25 Mar 2012, 9:17am PDT   Share   Quote   Permalink   Like   Dislike     Comment 49

mrcharlesecurry says

the credit that I had earned.

mrcharlesecurry says

I felt like I deserved one.

hmmm.....

B.A.C.A.H.   Sun, 25 Mar 2012, 9:21am PDT   Share   Quote   Permalink   Like   Dislike     Comment 50

mrcharlesecurry says

I just checked my credit report and it said there were three hard credit inquries but I do not recall giving anyone permission to pull my credit. I need to find out who made the three hard credit inquiries.

Bubba/bubbette, the less credit you have out there, the less inquiries there will be. That's onuva hassles comin w/ needlessly having more credit than necessary

mrcharlesecurry   Sun, 25 Mar 2012, 9:36am PDT   Share   Quote   Permalink   Like   Dislike     Comment 51

I did call Chase and received what I felt were very lame excuses for taking away my credit line.

mrcharlesecurry   Sun, 25 Mar 2012, 9:37am PDT   Share   Quote   Permalink   Like   Dislike     Comment 52

I still have plenty of credit.

xenogear3   Sun, 25 Mar 2012, 9:40am PDT   Share   Quote   Permalink   Like   Dislike     Comment 53

He is just mad that he caught a falling knife in 2010.

pongchen2000   Sun, 25 Mar 2012, 11:11am PDT   Share   Quote   Permalink   Like   Dislike     Comment 54

ThreeBays says

736 is not a particularly high score. At 45, if you had perfect credit record you would have a much higher number (closer to 800).

I don't grow up in US. I came here at 20's while at school. As some of you know, being a F1 student means you cannot work outside of campus. But with the economy so bad, I don't think an F1 student can find an on-campus job any more.

Anyway, my first credit card the limit was $500. Since my first card only had $500, all the cards I applied within 5 years of first card issued, the limit were below $1000. I only have 2 cards for the last 10 years. No debt. No car loan. My monthly credit card expenses is $1k and I always pay it off. And my salary along is 30% higher than average household income. Our household income is within top 8% of US household income. 2 years ago while I was checking out items at IKEA, the cashier asked me if I'd like to apply for their credit card so I'd receive certain % of discount so I said okay. The credit line came back as a joke for $500 bucks again. I was so pissed and I canceled the account right away.

My point is, being perfect in time to pay your payment isn't get you good score. Being perfect in time to pay your payment PLUS always borrow slight below your debt to income ratio WILL get you good score. My credit score was around 730-750 last time I checked (but still got $500 credit line with IKEA). On top of the report saying I didn't borrow enough to improve my score. America is an interesting country that I, as an Asian, can never understand why would I borrow more to increase my score.

xenogear3   Sun, 25 Mar 2012, 11:40am PDT   Share   Quote   Permalink   Like   Dislike     Comment 55

Your income and overall wealth have nothing to do with the credit score.
If Bill Gates pays everything with cash, he will have a very low credit score.
Credit score is never designed for the rich people.

It is mainly for the middle/low class. To fool them believe the "fairness" of the capitalism.

ThreeBays   Sun, 25 Mar 2012, 11:47am PDT   Share   Quote   Permalink   Like   Dislike     Comment 56

Pongchen, credit requires some building. I moved to US on H1B and was pretty interested in building credit in case I might need it later. Using 1st a secured credit card and buying a car on credit, then a couple more CCs and paying on time, within 5 years I had 750 score. Chase would give 10k limit with that kind of score, though you may need some history with them.

If you have lower score like 680 u can't qualify for cards with more than about 1k limits, but 700 can qualify for 6k or so.

If the OP is having only 730ish score after 45 years it should because he has some problems on accounts, or too many open accounts, high credit use ratio or something like that. He said he had 4 cards with Chase; IMO you should not have more than 3 total. Also I wonder what he is using to check his score. CreditSesame tells me my score is 30+ points higher than Equifax.

pongchen2000   Sun, 25 Mar 2012, 12:06pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 57

ThreeBays says

If you have lower score like 680 u can't qualify for cards with more than about 1k limits, but 700 can qualify for 6k or so.

Please see my post. Firstly, last time I checked my credit report everything looks good and the score was 730-750, not 680 as you suggested.

My credit report was basically almost blank since I only have 2 cards and 1 checking/savings account. No debt, basically no traffic regarding to my credit inquiry.

Secondly, I know I can build up my credit by borrowing more as suggested on top of my report. So I'm not asking how to improve but saying it's interesting how Americans view credit line as the more you borrow the better your score (assuming you pay at least minimum).

pongchen2000   Sun, 25 Mar 2012, 12:13pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 58

xenogear3 says

Your income and overall wealth have nothing to do with the credit score.

Yes and that's why I said it's interesting. Look around all other countries, especially well-to-do Asian countries since their average saving rate is 30% of their income. I can guarantee you the wealth as well as your income will be the key to how much you can borrow (or they will lend to you), not how well you can play the system. The more money you have, the more bankers call you asking if you'd like to borrow more.

Got the point?

pongchen2000   Sun, 25 Mar 2012, 12:24pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 59

pongchen2000 says

ThreeBays says

736 is not a particularly high score. At 45, if you had perfect credit record you would have a much higher number (closer to 800).

xenogear3 says

Your income and overall wealth have nothing to do with the credit score.

Yes and that's why I said it's interesting. Look around all other countries, especially well-to-do Asian countries since their average saving rate is 30% of their income. I can guarantee you the wealth as well as your income will be the key to how much you can borrow (or they will lend to you), not how well you can play the system. The more money you have, the more bankers call you asking if you'd like to borrow more.

Besides, my point is to say it's not true when you said " if you had perfect credit record you would have a much higher number (closer to 800)". What is the definition of a perfect credit record by the way? Paying off credit card every month with no debt and no loan doesn't mean perfect credit record? Then please tell me what else it means? Borrowing more?

Got the point?

ThreeBays   Sun, 25 Mar 2012, 12:31pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 60

pongchen2000 says

ThreeBays says

If you have lower score like 680 u can't qualify for cards with more than about 1k limits, but 700 can qualify for 6k or so.

Please see my post. Firstly, last time I checked my credit report everything looks good and the score was 730-750, not 680 as you suggested.

My credit report was basically almost blank since I only have 2 cards and 1 checking/savings account. No debt, basically no traffic regarding to my credit inquiry.

Secondly, I know I can build up my credit by borrowing more as suggested on top of my report. So I'm not asking how to improve but saying it's interesting how Americans view credit line as the more you borrow the better your score (assuming you pay at least minimum).

Is that how you think Americans think, or how the bureaus think? I don't think bureaus will give you a much better score for having tons of credit lines. They do give slightly more for having a variety of credit types, revolving as in credit cards, and installment like on a car, and mortgage. They say it shows that you can manage a variety of credit.

As for limits, who you get from probably plays a big factor. CapitalOne is notorious for low limit cards. Stores like Ikea might have low limits, Never had one. Chase gives pretty high limits.

xenogear3   Sun, 25 Mar 2012, 12:31pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 61

You don't get the point.

Capitalism encourages people to spend money, and have a high debt.

Saving is no good.

thomas.wong1986   Sun, 25 Mar 2012, 12:37pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 62

xenogear3 says

You don't get the point.
Capitalism encourages people to spend money, and have a high debt.
Saving is no good.

No.. would you apply the same standard on rating a bond issue by a corporation with high level of outstanding borrowing (highly leveraged) . Not to mention, with the higher debt, the US Govt rating was taken down to AA (credit score).

How do you rate entities that have NO debt ?
They certanly enjoy having a better credit rating..

ThreeBays   Sun, 25 Mar 2012, 12:46pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 63

pongchen2000 says

Besides, my point is to say it's not true when you said " if you had perfect credit record you would have a much higher number (closer to 800)". What is the definition of a perfect credit record by the way? Paying off credit card every month with no debt and no loan doesn't mean perfect credit record? Then please tell me what else it means? Borrowing more?

Oh, I see this is what you were disputing. No ,not borrowing more. In fact, a big part is to not use too much of your credit lines. It is good to have a variety of accounts like a couple of CCs and a car loan. This shows the lenders that you can manage a variety of credit.

The biggest factor assuming everything else in your record is peachy is longevity. People with 800+ scores usually have a lot of years of credit history, like 20, 30, 40 years. TSince the OP said he/she is 45 and maintained credit for a long time, that is why I say he/she could have closer to 800, all else being good.

According to Equifax, the length of my credit history (~7 years) is considered "poor". Having 3 CCs and a car loan is considered a "very good" mix. Having CCs only is apparently bad. Using less than 5% of available credit considered "excellent". I only conclude that after a lot more time, the score will get better due to age.

B.A.C.A.H.   Sun, 25 Mar 2012, 1:09pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 64

ThreeBays says

Since the OP said he/she is 45 and maintained credit for a long time, that is why I say he/she could have closer to 800, all else being good.

I think s/he said to be older than 45:


mrcharlesecurry says

I have established credit over 45 years.

ThreeBays   Sun, 25 Mar 2012, 1:18pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 65

@bacah, I know.

mrcharlesecurry says

 I am 45 with excellent credit and never has something like this happened to me until I inquired about a loan modification!

He/she must have established credit right after birth ;).

xenogear3   Sun, 25 Mar 2012, 1:32pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 66

No.. would you apply the same standard on rating a bond issue by a corporation with high level of outstanding borrowing (highly leveraged) . Not to mention, with the higher debt, the US Govt rating was taken down to AA (credit score).

On your credit card application, where do you put down your net worth?

If you buy house and car with cash, credit score is meaningless.

I have lots rich friends in top 1% tier (both income and net worth) don't know what credit score is.

B.A.C.A.H.   Sun, 25 Mar 2012, 1:53pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 67

ThreeBays says

He/she must have established credit right after birth ;).

oh, I missed that. You got me!

thomas.wong1986   Sun, 25 Mar 2012, 3:00pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 68

xenogear3 says

On your credit card application, where do you put down your net worth?
If you buy house and car with cash, credit score is meaningless.
I have lots rich friends in top 1% tier (both income and net worth) don't know what credit score is.

Yes, when an individual applies for a loan, their employment and income history, personal income statement and list of assets/liabilities is prepared.

Yes, cash will do, if you got it.

Well your friends better know what their credit history is, who is checking it if legit, any open loans in their name... after all identity theft is very common, even if no money is missing. Perhaps someone already has tapped into credit already borrowing lots of money in your friends name.

mrcharlesecurry   Sun, 25 Mar 2012, 10:11pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 69

Thank you.

mrcharlesecurry   Sun, 25 Mar 2012, 10:36pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 70

If Chase wants to cut my cc credit line by close to $50,000 they have that right. However, when they cut my credit line a couple of weeks after I call Wells Fargo then I am not ok with that. I called Wells Fargo because The Miami Herald stated that there was a settlement between the banks and the states and that if you had a loan with one of the big banks you should call to see if you are part of the settlement via a loan modification, a refi,etc. I called wellsfargo as advised and asked about the settlement and the possibility of a refi to a lower rate or a loan modification then a couple of weeks later my credit line on for Chase credit cards was drastically cut back. Close to 50k in credit line vanished overnight! The timing is extremely suspicious as if the big banks collude. So instead of getting something from the settlement and looks like the opposite happened. That is my belief. I am 45. My credit score was higher than 736 but I have three hard inquiries that I am not sure where they came from and I have been carring a balances of $40,000 as I was offered 12 months of 0% interest. I will pay back most or all when the 0% expires.

permanent_marker   Mon, 26 Mar 2012, 5:34am PDT   Share   Quote   Permalink   Like   Dislike     Comment 71

@mrcharlesecurry

is this enough to make you take your business to a local bank / credit union? :-)

mrcharlesecurry   Mon, 26 Mar 2012, 5:51am PDT   Share   Quote   Permalink   Like   Dislike     Comment 72

I do have my.checking and savings with the local credit Unicom but cc with the big banks.

ThreeBays   Mon, 26 Mar 2012, 3:41pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 73

So you had CC limits of $90K?

That's pretty high sir, and you're using quite a lot as you say. Most people with $30K+ CC balance have a problem.

3 hard enquiries, very high CC balances, some small late payments.
Lots of reason for them to be cautious.

NorCalBear   Tue, 27 Mar 2012, 8:22am PDT   Share   Quote   Permalink   Like   Dislike     Comment 74

I can tell you from personal experience that as a 45 y.o. with good credit that some of the data on my credit reports go back 20 years or more.

The history says 23 years 3 months, and the scores from the 3 agencies are 799, 815 and 809.

I can still see college loans from that late 1980s that have been paid off years ago.

The Equifax report has 10 credit "hard" inquiries on me in the last 24 months, but I did refinance to take advantage of a lower interest rate mortgage last year. Mortgage is not underwater, and the bank had another appraisal done where the appraiser actually walked through the house. That had never happened before with any other drive by get the comparables type appraisal.

I can see the company that put in the credit query, their address and the date or dates of the queries on my free Equifax report (the report is free, but if you want to know your score that costs a few bucks).

Of the 10 hard queries, 8 were within a 3 week window when I was refi rate shopping, so it might not be the number of queries but if they are clumped or spread out.

They have put my credit into 3 main buckets:
mortgage: house
installment: car loan
revolving: credit cards

On revolving credit, they list me with a debt to credit ratio of 3%, with a $2.5K balance on about $82K credit limit. No late payments for the 81 months that they track back. Revolving is simply a convenience, I don't hold a balance, its paid off monthly.

After finding so much available credit, I did cancel a few cards that don't get used. I was surprised to see 8 being listed since I only carry 2.

I think its the late payments that will drop your scores fast, mine reads nothing but "pays as agreed", but have at times in the past floated large balances on a card a few times. I financed a house remodel on a 12 months zero interest card once, made sure the balance was zero at the end of the 12 month period and just made the minimal payments to the card company while holding a balance.

So, as long as you make the minimal payment on time you get a gold star, if you start being late, it hits your score. Holding large balances is also a negative on the revolving credit.

I've heard from several friends and relatives in the past few years that their credit card companies slashed their credit limit to what they currently owed on the card. I think its the banks and credit companies reducing their risk, nothing more.

My first reaction wouldn't be collusion between Chase and Wells, I think it might just be coincidence and that carrying a $40K balance on a zero interest card right now is a warning sign.

I carried more than that on a zero interest card before, but that was back when we would all get rich on this new internet thing.

NorCalBear   Tue, 27 Mar 2012, 8:36am PDT   Share   Quote   Permalink   Like   Dislike     Comment 75

It might be very specific to Chase as well. I just looked a little closer to the "soft" credit queries, the ones that are only shown to you, but not others.

here is the entry that stands out:

CHASE
Address:
PO BOX 15298
WILMINGTON DE 19850
(800) 955-9900
Date of Request:
01/09/2012, 12/08/2011, 11/08/2011,
10/06/2011, 09/08/2011, 08/12/2011,
07/07/2011, 06/10/2011, 05/10/2011,
04/13/2011, 03/16/2011, 02/02/2011,
12/10/2010, 11/02/2010, 09/29/2010,
09/03/2010, 07/19/2010, 06/11/2010,
05/05/2010

I don't even have a card with Chase and they pull my credit info monthly. Crazy what they must do to customers.

mrcharlesecurry   Tue, 27 Mar 2012, 9:59am PDT   Share   Quote   Permalink   Like   Dislike     Comment 76

Thank you for sharing the information.

NorCalBear   Tue, 27 Mar 2012, 11:03am PDT   Share   Quote   Permalink   Like   Dislike     Comment 77

mrcharlesecurry says

Thank you for sharing the information.

Hope it helps. Its always helpful getting other perspectives, we all only see our narrow views, particularly with something that is as culturally inappropriate to discuss like personal finance.

Now I'm paranoid about why Chase is looking at my credit report every month, particularly since I don't bank or have any relationship with them.

Bank of America also seems to check monthly.

Anyone have any ideas about that?

Is this just the automatic report that gets run monthly so they can send me the preapproved credit card offers by mail that I shred into fire starter?

CL   Tue, 27 Mar 2012, 11:54am PDT   Share   Quote   Permalink   Like   Dislike     Comment 78

"Now I'm paranoid about why Chase is looking at my credit report every month, particularly since I don't bank or have any relationship with them."

Aren't these just inquiries so they can send you those pre-approved card offers?

StoutFiles   Tue, 27 Mar 2012, 11:57am PDT   Share   Quote   Permalink   Like   Dislike     Comment 79

NorCalBear says

Now I'm paranoid about why Chase is looking at my credit report every month, particularly since I don't bank or have any relationship with them.

When your credit score is checked more than X times per year, doesn't it lower your credit score per the credit score formula?

lurking   Tue, 27 Mar 2012, 12:26pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 80

NorCalBear says

Anyone have any ideas about that?

You are correct on the soft hits on your credit report from various banks, etc. They are caused by the credit reporting agencies giving and/or selling your information. These don't go against you. Your existing creditors may check from time to time as well, but that doesn't count against you either because they look at this as a soft hit. The checks don't go against your score unless it's a bank giving you credit because you filled out an application, or you are getting approved for a home loan, car loan, etc......something that you are requesting.

About 30 years ago I sent letters to all three credit agencies letting them know that they are not to sell or give my information (for the youngsters that's before Internet/email) so I don't have soft hits on my credit reports from companies that I don't do business with. The main reason I did this 30 years ago was so I wouldn't get junk mail/solicitations and even today I don't get solicitations. Back then all you had to do was send a written request that they not sell/give info for solicitations, etc. and the order was good for life unless I wrote to them and changed it. It may be the same way now, and I am sure you could find it on their web sites if you wanted to make the same request.

Update: 10:22 p.m 3-27-12 Here is a link to the FTC web site with a sample letter and the street addresses of where you'll need to send your request. http://www.ftc.gov/privacy/cred-ltr.shtm

NorCalBear   Tue, 27 Mar 2012, 1:47pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 81

lurking says

The main reason I did this 30 years ago was so I wouldn't get junk mail/solicitations and even today I don't get solicitations. Back then all you had to do was send a written request that they not sell/give info for solicitations, etc. and the order was good for life unless I wrote to them and changed it. It may be the same way now, and I am sure you could find it on their web sites if you wanted to make the same request.

Love it!

Thanks for the excellent idea!

Maybe a small forest in Oregon might get some larger trees and my mailman might not suffer from my junk (unsolicited) mail syndrome nearly as much.

xenogear3   Tue, 27 Mar 2012, 1:56pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 82

I thought that you cannot stop the soft hits.

elliemae   Tue, 27 Mar 2012, 2:48pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 83

lurking says

(for the youngsters that's before Internet/email)

Wait - are you saying that there was "life" before Al Gore invented the internet?

lurking   Tue, 27 Mar 2012, 3:20pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 84

Since posting earlier today about opting out of the three credit agencies furnishing/selling your information to solicitors I have had time to research this opt out I did 30 years ago. It appears from the Federal Trade Commission web site that you can still do this and you will need to write a letter........not much changes, at least with credit reporting agencies it seems. Here is a link to the FTC web site with a sample letter and the street addresses of where you'll need to send your request. http://www.ftc.gov/privacy/cred-ltr.shtm

zzyzzx   Wed, 28 Mar 2012, 1:12am PDT   Share   Quote   Permalink   Like   Dislike     Comment 85

I also think it's just a coincidence.

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