Airstud From United States of America, joined exactly 15 years ago today! , 3341 posts, RR: 5 Posted (4 years 11 months 4 days 3 hours ago) and read 2614 times:
See, my checking account is at BlueBank (it was originally at nice-people's-smallbank; four acquisitions later it's at BlueBank). Weirdly, I am 10+year employee of RedBank but I do not bank here (a weird decision whose roots I think are in my resentment of my first boss here, the most eye-poppingly incompetent boss in business history, but that's a whole 'nother thing).
Well it is time to apply for a loan (neighborhood of $6K, mostly for a car but also to consolidate some cc debt) and I figured why not just walk in to RedBank's "Financial" division (subprime lending; my score isn't as bad as it was four years ago but I bet it's still well under 700) and see how I fare. Surely RedBank will take less time to validate my employment
Then I thought what if the loan officer asks me why I don't bank at RedBank; Redbank has a huge "cross-selling" culture so I am certain there will be an attempt to have me bring my retail business over...and what I wonder is, is that going to impact the loan decision, and if it does...is that legal?
I know of course they're not allowed to consider race, gender, etc in loan decisions, but are they allowed to say, "Well we prefer to lend to people who bring their banking business to us?"
signol From United Kingdom, joined Oct 2007, 3081 posts, RR: 7
Reply 1, posted (4 years 11 months 4 days 2 hours ago) and read 2596 times:
Surely, if you're asking them for their business, they won't refuse that business on the chance of you bringing your other banking business to them? After all, they will be the ones to lose out on the interest payments on your loan.
Alternatively, have you spoken to the bank you do actually use for your current account? They may have better rates for existing customers. Again, some other banks may have special rates for new customers, so it's probably worth shopping around the loan market as a whole anyway...
Sorry to not be a whole lot of help
LAXintl From United States of America, joined May 2000, 28018 posts, RR: 50
Reply 2, posted (4 years 11 months 4 days 1 hour ago) and read 2593 times:
Banks can absolutely use previous banking history as part of their determination.
That's why some will offer preferential rates for existing customers, or go the extra mile for known previous customers versus someone off the street. As a small business owner for example I have gotten things done at banks based on my almost 30 year banking relationship simply based on word of mouth with branch officers that other financial institution would require reams of paperwork for. Another example is a long relationship I have had with a certain lender for that has financed vehicles for me for the last 15 or so years. Virtually no hassle, and at rates I cant beat any where else.
So yes having an existing positive relationship can indeed make a BIG difference how a bank (or suppose any business) treats you.
From the desert to the sea, to all of Southern California
CPDC10-30 From United Kingdom, joined Feb 2000, 4928 posts, RR: 22
Reply 4, posted (4 years 11 months 3 days 4 hours ago) and read 2429 times:
I really don't think they're going to care all that much, especially if you tell them about the long standing business you have with your current bank. However I have seen some banks which require their employees to have their salary be paid into a company account and not any other, so I'm not sure what the actual rules are in your case.
Your credit history, income, credit available and outstanding debts are what matter. But nowadays, is there really going to be a bank that will provide subprime unsecured loans at a decent rate??? Anyways - not here to comment on that.
When I was younger I applied for a loan at a small credit union and was turned down - because I had too much credit available to me (even though it wasn't being used). I had a credit card with a $20,000 limit - I wasn't carrying a balance but they treat it as if I could blow the entire 20k the next day. Only when I reduced that credit limit to $5,000 did they accept me. Maybe doing something along that example will help your case.
You will improve your chances of success if you close any lines of credit or credit cards that you don't need, or at least reduce the credit limits.
I work for a company named after a Northern California city that is known mostly for rectangular boxes with blinky lights on them. They recently started selling servers, but it doesn't mean that they actually use them themselves, at least not very much So maybe your employer will have a similar understanding.
Airstud From United States of America, joined exactly 15 years ago today! , 3341 posts, RR: 5
Reply 5, posted (4 years 11 months 3 days 1 hour ago) and read 2388 times:
Cisco uses Juniper, eh?
Anyhu - I've already gotten pre-approvals in the mail, most of them from the slimiest, sharkiest most usurious "lenders" out there (we're talking 99% APR for gosh sakes), but recently I was "courted" by Citi Financial. Still subprime, but nowhere near as slimy. I guess my conscientiousness re timely payments for the past several years is at long last paying off My pop has said that the less slimy subprimey lenders will probably work with me if I go to them but that they won't come to me. (I really should check my FICO scores though; I haven't done that in 2-3 years.)
As far as your example of having too much credit available - that can work both ways, because ratio of actual debt to credit is a huge component (30% or more) of your FICO score. So a person who carries a $0 balance on a $5,000 card would score lower than someone who carries $0 on a $20,000.
I sure hope to be carrying $0 before 2011 is ¾ over. My cc burden was >$9,000 three years ago; today it's less than half that.
CPDC10-30 From United Kingdom, joined Feb 2000, 4928 posts, RR: 22
Reply 6, posted (4 years 11 months 2 days 17 hours ago) and read 2356 times:
Quoting Airstud (Reply 5): As far as your example of having too much credit available - that can work both ways, because ratio of actual debt to credit is a huge component (30% or more) of your FICO score. So a person who carries a $0 balance on a $5,000 card would score lower than someone who carries $0 on a $20,000
If you are on a high income, then it is not a concern (but then you wouldn't be borrowing ) It isn't all about credit score. The bank will look at your ability to service the debt, and with a high credit limit, your minimum payment will be quite high if you max out those cards, and hence disposable income will be reduced in the bank's view. I don't know what the minimum payment on 20k of credit card debt would be, but I assume it would be at least $500 or so.
If you don't reduce the other credit limits, you are essentially asking to be provided with a) more credit, rather than b) the same level of credit at a better interest rate - nowadays banks will always prefer option B .