Your Personal Worth

My Chapter 7 was finalized in February of 2006.  A prolonged illness effected my ability to pay the bulk of my debts, so I chose a bankruptcy after first trying debt consolidation.  I have no desire to purchase anything that I cannot pay cash for, but I do need a credit card for travel, hotel reservations and possibly car rentals.  WIth this in mind, I contacted the local Citibank where I conduct all of my banking, at which time I applied for a secure credit card with a minimum deposit of $200.  After waiting patiently for over three weeks, I finally called their customer service credit card division and was proptly told that I did not qualify.  I asked why, and was told that they do not help people rebuild credit after a bankruptcy.  After I explained to them that it would be my own money that I was putting up as collateral, and that I saw no legitimate reason why the bank would not grant me a secured card.  I called several other banks and was basically told the same thing.  To me, their decision to deny secured cards was unfair, discriminatory and punative.  After all, these are the same banks that solicit credit to practically anyone who walks in the door.  Credit card companies do not even ask how many credit cards a person has before they issue the card, so I think they are at least partially responsible for dolling out credit to those who may or may not have the ability to pay if they happen to be hit with a prolonged illness or the loss of employment.  I am totally livid about the way I have been treated by Citibank, and I am now in the process of moving my banking elswhere.  Has anyone ever encountered this type of prejudice by a bank?

Addicted2it,

I can understand where you come from.  I was in your place not too long ago and felt like my own bank had turned it's back on me.  Unfortunately, when I really took a long hard look at my financial history and current state, I realized the bank had a point.  In fact I know their decision was purely based on lending rules and policies that even my branch manager could not over ride.  I stayed angry for a while and did change banks.  To this day I still use national credit lenders such as AMEX, Chase, and Citibank for my credit card needs.  My local brick and mortar bank cannot touch the offers that these lenders regularly solicit.

My guess is your local bank is not interested in pushing the secured credit card products do to its low margins.  Probably due simply the implicit hassle factor.  And my suggestion to you is allow yourself to feel angry over the whole experience, but turn than negative into a positive and go find a lender that really specializes in secured credit cards.   If I were you I would go to my site and first choose the New Millennium Bank Gold Visa Secured.  It does have the features you are seeking at a reasonable cost.  Fees and APR's should be considered, but having the card in your wallet is most important.  Your second card ought to be the Orchard Bank Unsecured Silver.  The reason I say this is that it is easy to qualify for and has acceptable fees.  Being unsecured, it will be a positive line of credit reporting to the big 3 reporting agencies.  Now it will have a low limit (300 dollars), but it will be reported.

I admire your will to live debt free.  Have you read Automatic Millionaire, by David Bach?  This book was very influential in my financial development.  The concepts are simple and fully integrate into debt free living while also rebuilding credit. 

Keep us posted on your personal worth journey. 

 

---

Barry Noret
Founder: CreditMania.com / YourPersonalWorth.com
Managing Associate - Top Equity Funding, LLC
PH: 512.415.1276
Fax: 866.223.2718
Email: liverich@yourpersonalworth.com


All comments should not be construed as legal advice.

Hi. I also agree with the moderator's response, but I'd also like to suggest additional "plans of attack".

Believe it or not, to keep this from happening to you in the future... you must get credit. I know... I know... you've been denied. Now, that the initial shock has worn off... what can you do???

First, get the secured (possibly low limit unsecured) with the cards the moderator offered... and possibly also Centennial and/or First Premier.

1. The main thing you need to know... is NEVER charge more than 30% of your limit (if possible)... if you truly want to maximize your future credit scores... which you NEED to focus on.

2. Use your cards as often as possible (in place of paying cash for food & fuel). Don't keep them just for emergencies, but also don't charge anything on your cards... unless you have cash available.

3. When you get home... put that $50 cash into a coffe can, savings account, etc. (somewhere you won't spend it)... and then payoff the balance you charged up (always less than 30% of your limit) within 14 days. Most credit card companies don't charge any interest on any purchases made within the last 20 days (some are even 25 days)... if paid & posted within the 20-25 day time frame. The reason I suggest paying no later than 14 days from the date of the charges... is to insure they post your payment prior to the 20th day. This is genius for 3 reasons! First, you're escaping interest charges (making your card more affordable, escaping the high rates, and is the same as paying cash). Secondly, the more often you do this... the better chances of boosting your credit scores "through the roof" within months. Last, this will also help you get better credit cards & offers very quickly... giving you some extra "perks" like air miles, hotel stays, rental cars, etc.

I'd also recommend buying a home (if you aren't a homeowner) as soon as possible, without busting your budget. Being a homeowner will help you with tax writeoffs, build better credit (faster), and get you better credit offers than renters receive.

Lastly, don't forget to monitor your credit reports for inaccuracies, incompleteness & unverifiability. More than 70% of all credit reports have these types of errors that lower your scores. I've helped many borrowers increase their scores into the upper 600's & low 700 range... even with recent bankruptcies.

In fact, sometimes it's easier to have a score within this range for someone that's had a recent bankruptcy than it is for someone saddled with 8 credit cards, 3 loans & a home loan (due to poor spending habits). Poor spending habits are more difficult to overcome when you're trying to boost your credit scores... even if you've never had any late payments. Think of it like this, since you have a new bankruptcy... you've been "shifted" into being primarily compared with other people who've filed for bankruptcy. By clearing inaccuracies from your credit report, planning a strategy for immediate score improvement (utilizing low limit credit cards) & constant credit report monitoring... your credit only has to drastically improve... only in comparison with other bankrupt consumers. Since you've decided to take a very proactive stance toward better financial management & score improvement... this "immediate" & temporary problem you had trying to get a secured card can & will be a thing of the past.

I've been in financial services for 18 years (mortgage & indirect lending). I know how the scoring system works, how the lenders "internally" score their clients & how the federal credit repair & debt laws work.

The FCRA, FACTA & the FDCA can assist your immediate efforts toward making sure that information contained in your credit reports won't slander you.

Most clients who've filed for bankruptcy tend to overlook the fact that their creditors may still be inaccurately reporting false information against them... impacting their (and your) scores in a very negative manner. This is a very common problem. Remember, the bankruptcy laws are designed to keep the creditors from collecting the debts and/or harassing you for repayment. But, the bankruptcy laws do not state that they're required to report your balances owed as zero (0) or paid in full.

I'm a mortgage broker, located in Kentucky. I've also provided FREE credit repair to my clients for more than 10 years... and even designed my custom-built software (also available on the internet) that can assist you in your credit repair (should you want to do so from the privacy of your own home).

In fact I train other mortgage brokers, auto dealers & realtors how to repair their client's credit (as a FREE service to their clients) using my software & credit repair techniques.

Credit repair shouldn't just be about writing dispute letters, it's also very much "education driven". Without the educational foundation and/or a place to turn for advice (like this forum), the results obtained via dispute letters would be temporary.

I can't stand companies that charge huge up-front fees for credit repair... since it's illegal to charge up-front fees for credit repair... and especially when they don't know what they're doing. Sorry for the novel i wrote, but as you can see... I really care about this... and wish you the best of luck in the future. And, I've helped you in some way.

PS - I hope I'm not violating any of the terms of service within this chat area. I like what the admin is doing here. Keep up the good work. And, if you want any other information from me... feel free to write me at lee@talkcredit247.com.

Lee Kendrick

I also understand. My bankruptcy  was dismissed over 5 years ago and though I've rebuilt my credit substantially and have two cards (no more) which I maintain a zero balance, a car loan due to be paid off within six months, a small student loan and a mortgage, I still get refused credit due to my bankruptcy. I make very descent money (over $80K a year) and my debt/income ratio is less then 30% but I recently tried to buy some new furniture on credit due to their great offer (no payments, interest for two years) and both CITI and HSBC (which I have my vehicle financed thru) both turned me down due to "Bankuptcy".   Now I will have to pay cash for it, not a big deal but those funds were earning interest in my portfolio or not buy at all which will have some impact on the looming recession. I agree with you about the banks and credit card companies being responsible for the huge debt Americans  have incurred. They will give credit to anyone and prior to my bankruptcy, (within days actually) they were still issuing me credit, to the tune of thousands of dollars which I could never have repayed and now they've convinced our government to change the bankruptcy laws in thier favor so if you borrow money from them you will owe them forever. That was not the intent of the bankruptcy system but I feel they have manipulated it to thier advantage. Originally they claimed they are losing hundreds of millions of dollars every year due to bankruptcy and that is why they have to charge exorbant interest rates and they implied that if the bankruptcy laws were changed they could lower their rates but so far I have seen nothing of the sort, in fact I've seen them actually raise the interest rates. Go figure.