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Rejected by every credit card; students loans to blame?

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  • Rejected by every credit card; students loans to blame?

    Hello all,

    I'm new to the forum but have heard that it may be helpful with a problem I'm having.

    I'm an R3 with substantial student loan debt. A little background - before residency, I had one credit card in college which i have since cancelled long ago. My credit history isn't great but my credit score is consistently in the high 600s/low 700s. I have no red flags on my credit report.

    Since graduating medical school, I've applied for every tier of credit card imaginable (not all at once), including secured credit cards, and have been rejected seemingly due to my debt-to-income ratio. This has perplexed me because my rent isn't outrageous and my student loan payments are super low because I'm in residency.

    I've always thought it to be due to my student loans, but wondered why my colleagues with student loan debt did not have this problem. Looking at my Experian credit report, it seems like they're counting my interest (negative amount) as credit used against my available credit (my principal) resulting in a 100%+ debt-to-credit ratio. I don't know if this is normal or a miscalculation but it doesn't seem right.

    As of yet, no one I have consulted has been able to figure out what's going on. My friend has offered to placed me as an authorized user on her card so at least I'm building some credit while I figure this out. Any insights, recommendations or thoughts would be genuinely appreciated. Thanks so much!

  • #2
    It's probably primarily that you have little/no credit history. Student loans really never factored into my credit score and it was always high 700's in residency even with high student loan balances and never having owned a home.

    You should go down to your bank and ask them for a secured credit card.

    Your friend is nice but naive. No way would I add an authorized user to my credit card who I'm not married to.

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    • #3
      Don't use your friend.
      secured CC

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      • #4
        I have been rejected from all secured CCs that require a hard inquiry. Also, the reason they give me in rejecting my application is debt-to-income ratio.

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        • #5
          Your parents....?

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          • #6
            Have you ever called the reconsideration line after being rejected and talked to them?

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            • #7
              Or live without a credit card

              live within your means, once you finish res and you start paying down your student loans, you can rebuild your credit as others mentioned above.

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              • #8
                It sounds like you are saying your credit report utilization ratio is at 100%. If you can figure out how to fix that ratio, you will be approved.

                Perhaps develop a relationship with someone at your local bank branch. Perhaps print out your credit report and go over it with the banker or with a trusted friend who understand such things. Then come up with a plan to fix that 100% utilization being reported on your credit report.

                Maybe pay down some of your debt, or figure out how to correct your report if there is an error. Or develop a relationship with the banker so they can override the automated computer decision and give you a secured credit card based on an override by a banker who knows you and your situation.

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                • #9
                  Go in to your bank where you have your checking/savings and have a face-to-face conversation and see what they can do. I'd be surprised that they wouldn't issue you a secured credit card.

                  In this day and age living without a credit card is quite difficult, particularly when traveling.

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                  • #10
                    I imagine cancelling the single card you had was a big misstep.

                    Usually the easiest card to get is going to be a gas card or some sort of store-branded card. Otherwise some sort of loan (and subsequent history of timely payments) might do the trick.

                    However-- I wouldn't keep applying, this is going to look horrible on your report. Every application, especially with a denial, hurts your credit score. Get on creditkarma or wherever, keep checking your score without running your report. "High 600s" is only a decent score if we're talking people with debt problems or missed payments.

                    And finally as others mentioned-- you shouldn't need a credit card. Simply do without if you have to.

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                    • #11
                      Have you looked at all 3 credit bureaus? My brother constantly has inappropriate information on 1 of his 3 that hampers his credit. If you have a friend or family member that will add you to their card I believe it is ok. As long as you are not paying them a fee to improve your score I don't think it is against any rules. Just make sure if you use the card you do it with immediate payback (assuming they even give you the card). I added a nanny to a credit card once. Maybe not the best idea but it didn't end terribly.

                      As a resident you're not likely to be missing out on a terrible amount of credit card rewards even if you don't get one. I do think it is valuable to have a credit card. Credit card gets stolen and it is more on the credit card company. Your debit card gets run and your money is gone now.

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                      • #12
                        I could be mistaken but I think that being an authorized user no longer even counts toward building your credit history, so I would avoid that.

                        I think going to your bank and talking to them would be your best bet at getting a low limit, secured card.

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                        • #13
                          Originally posted by GUtiger View Post
                          I could be mistaken but I think that being an authorized user no longer even counts toward building your credit history, so I would avoid that.

                          I think going to your bank and talking to them would be your best bet at getting a low limit, secured card.
                          Authorized user definitely factors into your score.

                          I had to call and cancel a card recently because the account holder's high balance was dinging my credit. Score went up after it came off my report.

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                          • #14
                            Originally posted by Craigy View Post

                            Authorized user definitely factors into your score.

                            I had to call and cancel a card recently because the account holder's high balance was dinging my credit. Score went up after it came off my report.
                            Definately. Even if you are not the primary user, you can be either helped or hurt. I had a surprise and my bank was able to remove me and actually removed the problem from the credit bureaus that it was reported to promptly. You don't necessarily have to take it, ask and it can be removed.

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                            • #15
                              Best way to immediately improve your credit score is to be added as an authorized user to someone with a good credit history. If you have a family member willing, that is a good place to start. That will give you the credit history associated with the card you are an AU on. Give it some time, and recheck your score on credit karma etc.

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