I have been fiscally responsible since I was a teen and my credit score has always been immaculate. At age 25, my credit score was 825.
However, at age 28, my current age, I decided to go to law school and take on debt and no job while I completed my degree. I recently received my degree and now am awaiting bar results. I still remained financially responsible with credit cards all through law school.
Recently, I applied for a couple of credit cards and I was denied. For the first time ever, they asked for pay stubs. I could not provide as I was a student obviously.
More importantly on credit karma, I looked at my credit score recently and it had dipped to below 700 for the first time in my life. I panicked and began researching. In June, my credit score was 750+.
I currently have only 3 credit cards. One is paid off completely every month, and one carries a balance with about 50% balance usage ( a no interest card). The third is not being used. I have over 120K student loans. I have never once missed a payment or been late on any credit, carloans, etc in my life.
So what could have caused such a drop in my score? Is it my utilization of the one credit card of over 50%? Is it my student loans? Is it being denied a credit card?
I appreciate any advice or info.All of the above.
You're an unemployed student with no income and thought you'd get approved for a credit card these days? That's a no-go in itself, let alone when you have over $120k in debt.
poorpence
Member
posted: Sep. 1, 2010 @ 10:05p
The card not being used, may not be factored into your score. If that card was not used within a year, it becomes invisible to FICO. Your 50% utilization is probably costing you about 30-40pts. Since you are effectively using only 2 cards you have 100% of your revolving cards being used. that's costing you about another 30 pts. Your student loans can only offer GOOD pts with age. As long as you don't miss a payment, the student loans will increase your FICO score as they age. You may want to consider getting a couple more credit cards and be sure not to have more than 1/3 of your total revolving lines showing a balance per month.
Can you do a BT to a signature card from the current card with 50% utilization. Signature cards are not graded for utilization, so you would not be penalized for carry that balance.
check your annual free credit report and see if there is something wrong with it, I would at least make utilization under 30%, but you probably don't need to worry since your credit score is on the rise, I personally think credit score wasn't the reason why you got denied, nowadays credit lendors require you to have a job, or you'll become a risk, even with a high credit score. The way to qualifying for credit cards has changed... (personal opinion)
It happens man. I have 785 and my wife and I both have 6 figure salary and I have $50k+ in liquid assets at Wells Fargo with a PMA account and they denied me their horrible CC. They won't even approve me to trade credit spreads.
NothinisFree said: Recently, I applied for a couple of credit cards and I was denied. For the first time ever, they asked for pay stubs.
You were reporting income on a credit application but had no income? That's fraud.
I hope you went to a top 25 law school or graduated in the top 10% of your class. I know many people who went to a third tier toilet law schools who would gladly trade their degree to rid themselves of their debt burdens.
NothinisFree
Member
posted: Sep. 4, 2010 @ 4:29p
Thanks guys for the info. Sorry for the delay. Looks like I need to apply for more cards and lower the utilization on the one card that I have a balance on.
jkimcpa. The bank was US bank. I have heard horror stories about them.
Brettydoyle. I have income from other places besides employment so no, its not fraud. You can sleep well .
As far as law school, I didn't go to a top 25. I knew my job chances, the opportunities, and the pay scale before going that route however. I know the limits of my decision. I knew what I was doing before attending my school as I researched the whole thing inside and out. Those students who complain that their degree didn't land them a 100K job coming out of school are a joke. As long as I can get a job paying 60K in an area of the law I enjoy, I will be content. I know my performance and abilities will eventually (5-10 years down the road) get me to the 100K mark. I don't expect my degree to be the golden ticket. I actually went to law school because I enjoy the law and not for the "Big Firm" gigs.
NothinisFree said: Brettydoyle. I have income from other places besides employment so no, its not fraud. You can sleep well .
NothinisFree said: Recently, I applied for a couple of credit cards and I was denied. For the first time ever, they asked for pay stubs. I could not provide as I was a student obviously. Then why didnt you provide them documentation of this "other" income?
NothinisFree
Member
posted: Sep. 5, 2010 @ 3:17p
Glitch99 said: NothinisFree said: Brettydoyle. I have income from other places besides employment so no, its not fraud. You can sleep well .
NothinisFree said: Recently, I applied for a couple of credit cards and I was denied. For the first time ever, they asked for pay stubs. I could not provide as I was a student obviously. Then why didnt you provide them documentation of this "other" income?
How do you provide proof of income of a garage sale and eBay sales?
NothinisFree said: Glitch99 said: NothinisFree said: Brettydoyle. I have income from other places besides employment so no, its not fraud. You can sleep well .
NothinisFree said: Recently, I applied for a couple of credit cards and I was denied. For the first time ever, they asked for pay stubs. I could not provide as I was a student obviously. Then why didnt you provide them documentation of this "other" income?
How do you provide proof of income of a garage sale and eBay sales? With a copy of your 1040.
NothinisFree said: At age 25, my credit score was 825 ... However, at age 28 ... Recently, I applied for a couple of credit cards and I was deniedYou might have missed it while still in law school, but there have been some minor hiccups within the past 3 years. Even if your score was still 825, you probably would be asked for paystubs for a CC application with no income figure.
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