Local Credit Union Denied Me A Secured Card

[deemac76]

Im foaming at the mouth after leaving my local credit union (i recently became a member). First of all they denied me of a checking acct. and gave me a savings, they told me that my EQ report still showing bad open accts. So I asked the branch manager if they had any secured cards I can take part of in order to establish a good payment history. She told me to see her in 6 mos to see what my credit looks like then, so I told her its going to look like the same it does now if I dont get something going asap WTH.
I thought credit unions are supposed to be better than normal banks, she also said since the economy is bad now they need a higher credit score to qualify for any loans they offer. So I said thank you and walked over to the teller and closed the acct, got on the phone and open a checking/savings at USAA and their rep told me i can open a CD at a min of $250 and they'll issue me a CC against my money. Go figure

[LSUTiger32]

It just depends. Usually the smaller local banks and credit unions are better, but obviously that particular one isn't do well right now and has tightened their standards.

[deemac76]

It just depends. Usually the smaller local banks and credit unions are better, but obviously that particular one isn't do well right now and has tightened their standards.

I guess your right but it was odd coming from a credit union that claims to be members owned. But hey getting the account with usaa was another surprise so I'll take advantage of the opportunity them. Thanks for the reply LSU. Go Saints

[LSUTiger32]

Others have said USAA is great to work with, but I would not know! No problem, and WHO DAT!!!

[Flamingo]

The branch manager actually gave you good advice to come back in six months...by that time you should be discharged and have worked on cleaning up all three of your credit reports. Until you have that discharge in hand, cleaning up reports right now is not worth it because it takes several months to get things cleaned up and accounts listed as being discharged. Even then with a BK on your record, there is no guarantee of being approved for any credit or secured card for a while.

[LSUTiger32]

The branch manager actually gave you good advice to come back in six months...by that time you should be discharged and have worked on cleaning up all three of your credit reports. Until you have that discharge in hand, cleaning up reports right now is not worth it because it takes several months to get things cleaned up and accounts listed as being discharged. Even then with a BK on your record, there is no guarantee of being approved for any credit or secured card for a while.

Good catch Flamingo, I didn't see that in the sig line. Uh......yeah, wait until the nail is in the coffin before you get married again. You know what I am saying?

[backtoschool]

I guess your right but it was odd coming from a credit union that claims to be members owned. But hey getting the account with usaa was another surprise so I'll take advantage of the opportunity them. Thanks for the reply LSU. Go Saints

Credit Unions are small and are often more risk adverse than banks when it comes to bankruptcy. There are a few credit unions that are known for being bk friendly, but many small, local credit unions are very conservative when it comes to bankruptcy.

[deemac76]

Thanks for the replies and advice, Im just eager to get started on a different path with my credit. My bankruptcy comes from 65,000+ medical bills from myself and my daughter and not irresponsible debt, so Im looking forward to rebuilding my score asap. But good things come to those wait. Thanks

[Freddy03]

Thanks for the replies and advice, Im just eager to get started on a different path with my credit. My bankruptcy comes from 65,000+ medical bills from myself and my daughter and not irresponsible debt, so Im looking forward to rebuilding my score asap. But good things come to those wait. Thanks

Do you mind sharing what credit union it was? I recently just opened on with out any problems in FL.

[deemac76]

Yeah It was central florida educators credit union

[BubbaJoeBob]

Credit Unions are small and are often more risk adverse than banks when it comes to bankruptcy. There are a few credit unions that are known for being bk friendly, but many small, local credit unions are very conservative when it comes to bankruptcy.

One should not paint credit unions with such a broad stroke.....

[backtoschool]

It is never a good idea to paint anything with too broad a stroke. Let me clarify my earlier post. Some credit unions are very small. They do not have the capital and the ability to sustain a lot of write offs and losses. Those credit unions tend to be more conservative in their underwriting of loans and accounts. Credit unions are member run. Their boards (who make the underwriting decisions) are chosen from the members. If a certain credit union has a board that is comprised of conservative, anti-bk members, then the underwriting policies of that credit union will reflect that bias. The reverse holds true too. As with anything ymmv.

[jadams]

Have you been using the savings account? Maybe they just want to see some positive history with the CU before progressing to loans.

Small credit unions can be helpful and more lenient about some things, but as you found their size can also sometimes be a handicap. Often it means they just can't offer as lenient underwriting as some of their larger peers. Much of the smoke and mirrors that allows a financial institution to protect themselves from the risk of lending to lower and lower tiers of borrowers requires a large pool to spread the risk over and lots of accounts if they want to expand into securitization and other methods of funding the loans without tying up as much of their capital.

Or, it often results in policies and procedures that strongly reflect a small group's particular beliefs and biases. A larger CU might be using broad financial models in their underwriting but the small CU might just be "apps go to Mary's desk, and Mary thinks BK and people with first names that begin with R are evil."

Be glad the branch manager was willing to be honest about an application not being successful at this point. Many would have just taken the application and dinged you with inquiries on your report, even if it was never going to be approved.

As you found, there are plenty of other places that will be glad to have your business.

And before someone says it, there is still risk and expense to the financial institution in offering a secured card.

[tobee43]

Credit Unions are small and are often more risk adverse than banks when it comes to bankruptcy. There are a few credit unions that are known for being bk friendly, but many small, local credit unions are very conservative when it comes to bankruptcy.

b2s makes an excellent point. these credit unions are "member" owned...that meaning YOU and ME own it...in a way and we don't want them messing with our money. so many of them are a bit more conservative...while others once you are fully established will, in fact work with you.

i researched well into opening an account with a cu prior to filing because it was my understanding that they usually were more understanding of their members situations, however, if you JUST opened the account, and i understand you asked for a "secured" cc...they still want some history with you.

we now, have had our cu account almost 2 years, but were lucky enough to have been approached by capital one less than 8 weeks after our discharge so that we got our cards and began to rebuild our credit almost immediately.

also....dee...i totally understand your frustration...we had over 200k worth of medical bills and our bk had nothing to do with money mismanagement. but time really does HELP heal....

best of luck!

[backtoschool]

There a couple of national credit unions that are known to be bk friendly. Patelco, out of California is one of them. I belong to the credit union associated with my graduate school, and to a big bank. I like the free checking and the personalized attention of my credit union (which I have a 5k secured card with that I use for travel exepenses). But as jadams said, I like the broader, more objective risk models that the big bank offers.