Why the heck?! (Credit Report question)?

Question

I have had a capital one card for years now, it only has a $500 limit w/ a high intrest rate and I have NEVER been late on it. After significantly improving my credit (years of work) I applied for the next step up capital one card that has a 12% intrest rate and I was denied! 1 week later Citi bank sent me an offer of 12% with 0% on balance transfers for 1 year and I was approved in seconds for a MUCH higher limit than my capital one card. I am so offended by capital one, I transfered my $500 card and plan on canceling it. Why did this happen?

In response to Dragonfire: When I got the card I was 19 years old and did have not to good credit, my score was 658 at the time but now 7 years later I have busted my butt to improve it and I have, my credit score is now 725. I have racked up the card and payed it off more times than I can count and I also have 3 other credit cards that are completly paid off (but not cancelled) along with a car loan. I did go over the limit twice by a few dollars but surely that cannot be the reason they denied me.

Answer 1

Because they wanted to keep you at the higher interest rate to make money off of you!

Capital One is good for that, I know from experience.

If you don't pay an annual fee, transfer the balance to Citi and leave the Cap card open with a $0 balance. They will increase your limit and lower your interest rate.

Regarding the Citi card, if you transfer the balance, there will be a one time 3% transfer fee. If you make any purchases on the card, they will be paid after the balance transfers are paid off. The interest on the purchases will accrue.

I swear by balance transfers. I haven't paid interest in years.

Answer 2

The more you read on credit, or fixing your credit the more you will see that one of, or I should say the worst credit card to get is Capital One. For one they report your limit as to what your highest use was. Example say you have a $500 limit but use $100, they report your limit as $100 so it appears that you are maxed out. If you do not have a yearly charge pay it off and keep it, if you do have a yearly charge cancel it 30 days before that charge is due, in that way you build up a good credit rating with the new company and the loss of $500 credit will not be much.

Answer 3

What you will find is that EVERY card company has done something to upset a card holder at one time or another.

Capital One is one of the largest issuers of cards to people with less than optimal credit scores but they also have some better cards as well.

Speaking just for myself, I still have the Capital One card with the $500 limit and the 18.99% interest rate that was the first card I got after a BK years & years ago. BUT I also have 2 other cards with Cap One with generous credit limits, low interest rates (4.99 and 9.99 fixed) AND regularly get balance transfer offers with no balance transfer fees and low fixed APR for the life of the balance transfer.

So while I know some people have an extreme dislike for Crap One (as they like to call Capitol One) I have no complaints as they have been very good to me over the years.

Answer 4

It is good that you have never been late, but have you been over limit?

All credit card companies base their decision off the information they have about you, either from their relationships, the credit report, or both.

If you are near the maximum of your credit line, and aren't making significant payments on the $500 credit line to bring it down to zero, they may have decided that it wouldn't be a good idea to give you a $5000 dollar credit limit.

I wouldn't take it as a personal attack. They try to make difficult decisions on whom is a good credit risk, and whom isn't. Think about all the mortgages that were made out to people these last couple of years, a little bit of conservatism isn't bad. It wasn't that these people were bad, they just let the desire to own a home fog their vision of what they could do at the current time. A couple of people saying "No" may have been a good thing.

Calling Capital One to cancel is a good idea. Tell them why you want to cancel, and see if they will make you a better offer. If they can't/won't don't worry about it, this is a small issue to worry about.

Answer 5

Sometimes the credit card companies do some thing which has no reason behind. So as you are not approved try toi get some other card which is better than this.you can get some good credit cards with low apr and some reward programs and then buy the necessary things with this card and pay the bills on time. You can also try some reward cards they are good. All these will make your credit good.Discover has some cards with 0% intro apr rates and also some reward programs.
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http://www.creditcardbiz.blogspot.com

Answer 6

a 500 dollar limit with high interest indicates a poor credit history or no credit history
1. you do not state you current income and what else is on your credit score ( negative wise or other loans/ balances )
2. a transfer indicates you carry debt, even if 500 dollars that tells me you make only minimum payments and thus are not qualified for lower interest rate much less and increase in your credit line
3. just becuase citibank gave you a higher limit does not mean your worthy of it, citibank is the number 1 issuer of CC and the number 1 in defaults amoung it's users, they are very aggressive in signing people up with bigger than expected credit lines
4. the Amex card is for true power users as as you know you MUST pay off the full balance at end of month since it's NOT revolving credit, hence why most do not qualify for the card
5. you should always pay the FULL balance at the end of the month, if you can't then you cannot handle credit

Answer 7

Don't cancel the Capitol One card. With it goes all your history. Keep it open. Just don't use it.

Capitol One turned you down because they already had you paying the higher interest rate. The best way to get them to increase your limit and lower the interest is to pay the card off in full every month. Then about every 6 months or so they will increase your limit. They will also drop your interest rate after a year or so.

Answer 8

Welcome to "Credit Cards 101".

Lesson learned: If a credit card company will not deal with you, call around. There are dozens of others that want your business.

DO NOT cancel the card out. Just quit using it. If you cancel, you will end up hurting your credit score for a while.

I would call them up every 6 months and ask them to lower the interest rate and raise your credit limit. Tell them you have other companies asking for your business and wanted to know if Capital One is still interested in keeping you.

Answer 9

Simple, It could be that Capital one uses one credit reporting company and city uses another. For example if your credit score in Equifax is 650 or more and in Transunion your score is below 600. Citi uses Equifax therefore they are going to give you a better rate and approve you on the other hand capital one uses Transunion and your credit looks poor for them. What i recommend you to do is go a see your credit score in the 3 different credit reporting agencies. transunion/ equifax and Ceridian. you are going to see that are different. once you identify which of the credit report agencies has your high score try to apply to companies that used that agency only. When you make an application for credit always ask what credit agency they use to evaluate your application. I hope this helps

Answer 10

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