Credit Card Approval System

L[Deactivated] on 11/12/2023 - 17:45
Last edited 11/12/2023 - 18:09

Had 2 credit cards that combined together was $15k limit. Closed down 2 of the cards, and tried to apply for a Prestige/Platinum card from Westpac & ANZ $15k limit. Same financial circumstances, no lifestyle changes, actually expenses went down roughly 20% (due to less eating out), income about to get a 5% increase next month.

Yet, both ANZ & Westpac from what their assessment Team told me, is when they run my details through their system, it's showing up as $0 limit; not even $6k, not even $10k nor $15k limit. $0 LIMIT.

Anyone here work in banks/credit card team can give a little insight as to how it all works?

Edit: TIL having an Excellent Equifax credit score means nothing… All comes down to serviceability….

Financial

Comments

  • Baysew on 11/12/2023 - 18:05
    +4

    Yes, computer says no.

  • Danstar on 11/12/2023 - 18:09

    How long ago did you close the 2 cards ?

    • [Deactivated] on 11/12/2023 - 18:09
      -2

      1.5 months ago; and it was reflected on my recent Credit Report as well

  • Godric on 11/12/2023 - 18:16
    +3

    Look another one

  • CyberMurning on 11/12/2023 - 18:18
    +2

    the rule when you got those 2 cards and now is different.
    so now under the new rule you cant afford a card.
    dont be sad. i got rejected for $1,000 limit card. yes a thousand. i asked for a thousand.

    in the past? i got 2x $15k cards plus one black card $30k limit

    • [Deactivated] on 11/12/2023 - 18:25

      What new rule are you referring to may I ask?

    • techno2000 on 11/12/2023 - 18:43

      Yes I too got rejected for a measly increase on a credit card which I had a huge limit before and had reduced it to 1/5th for Home loan purpose.
      Unable to understand the logic.
      Computer says No.

  • Unorthodox on 11/12/2023 - 18:19

    Need basic information

    Income range + work type
    Expenses (rough)
    Dependents
    Debt/liabilities

    • [Deactivated] on 11/12/2023 - 18:28

      Full time 26 y.o Nil dependent, $125k pre tax, expenses (incl mortgage) around $45k/yr , liabilities is just home loan $500k+

      • Unorthodox on 11/12/2023 - 18:38
        -1

        Damn, is it permanent work and over a year tenure?

        If so, worth asking them what other info that need to help the assessment. Could be a stuff up on a field (eg expenses drop down as weekly instead of month etc).

        Higher income but similar circumstances and I have 3x $15k cards churning for points at the moment across the majors.

        • [Deactivated] on 11/12/2023 - 18:43

          Yes sir, full time perm. Applied both with ANZ & Westpac, both had the call back to verify the details with me so no errors on the field when applying. Literally both said Denied during the call… They can't provide any other reasoning besides "it's the system that tells us it's rejected based on the details you provided us…."

          • Unorthodox on 11/12/2023 - 19:05
            +1

            @[Deactivated]: Only other thing I can think of is your Savings / potential other income.

            e.g. if you don't at least split out xxx from your offset etc as put that as savings

            Given the two hard declines, worth waiting at least a few months before trying again. If you're with CBA as well, you can generate a free credit report too and see if perhaps anything pops up as there's usually a delay in anything reported

      • sumyungguy on 11/12/2023 - 18:54

        Your mortgage repayments should be just under $40K per annum, so looks like you've under-declared your expenses.

        • [Deactivated] on 11/12/2023 - 19:12
          -3

          Expenses are roughly $15k/year (shared between my partner and I)… The application asks if it's shared and I always tick the box & input 50% share, hence roughly $8k/year for me individually…

          • sumyungguy on 11/12/2023 - 19:37
            +2

            @[Deactivated]: Your share of rates, electricity, utilities, NBN, mobile telephony, groceries, take away food, fuel, rego, life/home/health/car insurance, entertainment, health & dental care; holidays, clothing, etc: $153 per week?

            • [Deactivated] on 11/12/2023 - 22:08

              @sumyungguy: Is it that hard to believe? Everyone seems to question it…

              Council rate: $380/qtr ($127/mth)
              Electricity (full solar): $220/qtr ($75/mth)
              Gas: $90/qtr ($35/mth)
              Water: $350/qtr ($120/mth)
              Groceries: $500/mth
              Internet+SIM: $120/mth
              Insurance (car,house): $200/mth
              Lifestyle (gym,eat out,shopping): $200/mth
              No private health insurance
              No fuel, EV car charging free from solar

              Total so far: approx $1380/mth split by 2 people is roughly $688 , split that into 4 weeks : $170/wk

              • sumyungguy on 11/12/2023 - 22:27
                +1

                @[Deactivated]: ASFA Retirement Standard for the June quarter 2023 suggests a retired couple aged 65–84 living a modest lifestyle (full Age Pension) spends $880 per week. So by declaring you're living on $340, the banks would rate this an erroneous under-declaration. Retired home-owner couples can barely survive on the Age Pension.
                https://www.superannuation.asn.au/wp-content/uploads/2023/10…

              • BigBirdy on 12/12/2023 - 08:15

                @[Deactivated]: Maintenance on home, depreciation on car, medical (doctor, dentist, optical, etc)? Gas $90/QTR sounds very low, as does groceries and lifestyle.

                How much are you saving per year, ~$45K by your figures?

          • spackbace on 11/12/2023 - 20:32

            @[Deactivated]: As above, their own threshold for your expenses would be higher than you're thinking, probably more along the lines of $2,000-$2,500/month as a couple, so $1,000-$1,250/month for you as an individual

  • garetz on 11/12/2023 - 18:23
    +2

    When interest rates go up its harder to get credit, when interest rates are down its much easier. The difference is how serviceable the debt is.

    I would never cancel a credit card unless i knew the next card would be 100% approved. You were naive and now you learnt a valuable lesson.

    • Muzeeb on 11/12/2023 - 18:26

      Harsh but fair.

    • techno2000 on 11/12/2023 - 18:39
      +1

      But if you dont cancel that other card,they will include that credit limit and reject your application anyway so……….

      • [Deactivated] on 11/12/2023 - 18:44

        That's correct… Not sure what @garetz trying to imply here

      • tooblue on 11/12/2023 - 19:12

        He could've reduced the existing cards limit to minimum. But now he has not credit card at all.

        • [Deactivated] on 11/12/2023 - 19:14

          both minimum is $6k limit, not sure how much lower I can possibly go

    • burningrage on 11/12/2023 - 21:37

      This is the right strategy. The Responsible Lending claptrap has basically changed the way they approve credit cards.

      So even though you may have been responsible credit card holder in the past and earning good income (>$180k) with less than 30% income spent on mortgage, they still would decline your application because they "think" (or computer says no) you can't afford it.

      So now when you close your credit card for $6k limit, you cannot get that $6k back if you apply a new card. It's stupid I know.

  • Pelicannn on 11/12/2023 - 19:12
    +2

    In my experience of card churning, ANZ have the strictest lending criteria of the major banks. For what it's worth as some basic circumstances, at the time I was on approx $180k before tax, home loan (~300k owing, property value around $975k) and car loan (~50k). With the only other card I had at the time being an Amex with a $3,000 limit I was rejected from ANZ. From that experience, and reading here/whirlpool etc and other friend's experiences I completely avoid applying for anything with ANZ.

    Try AMEX or NAB. Have never had problems with them before.

  • tsunamisurfer on 11/12/2023 - 19:30

    When did you close those CC's, was it long enough ago to be reflected in your credit file?

    When you had 2 CC's combined $15k then apply for TWO CC's in close succession for $15k each, thats a bad look.

    Now you have 2 rejections recorded.

    Do not apply for anymore for a few months.

    Overall, virtually all bank staff DO NOT know the workings of the credit application algorithm. They are all trained to trust the computer and if the computer says No, they don't know why and its designed like that so people cannot game the system if they know what specific item they need to 'address'.

    • clover on 11/12/2023 - 20:23

      Agree. the banks dont reveal their criteria for credit card approval so nobody here knows the exact reasons. We can only guess. No point asking

    • burningrage on 11/12/2023 - 21:41

      In my opinion, they should be forced to reveal why. There is nothing illegal to address items of concern as I know for sure they don't take your bank balance as consideration. My last credit card application didn't ask for it so other than this, it's mainly serviceability but which serviceability that needs to be improved, I think the banks should be forced to reveal.

      Otherwise, they can be opened for discrimination (eg: ethnic applicant name leading to nationality presumption matched with default history committed by that nationality).

      • tsunamisurfer on 11/12/2023 - 23:48

        In my opinion, they should be forced to reveal why.

        I have worked in this space previously.

        The banks spends millions of dollars on :
        - Economists.
        - Actuaries.
        - Analysts.
        - Developers.
        - Testers.
        - Software.
        - Data Warehousing.
        - Credit Agency data.

        Why would they share their workings (IP) with you?

        The answer is the same, no.

        As for discrimination, their business IS discrimination. All the algorithms and software they develop is DESIGNED to discern good risk clients vs bad risks.

        They want to get clients to make money. They want to avoid clients that will lose them money.

        If it makes you feel any better, I have never once seen an algorithm or a line of code that says :

        If Surname = 'Patel' or 'Gupta' or 'Wong' or 'Chan'
        THEN applicationstatus = 'Reject'.

        • burningrage on 12/12/2023 - 08:22
          +1

          I think most normal human being don't expect such an esoteric proposition in explaining why a credit card application was denied.

          I recalled one guy who tried his best to hint to me without being explicit but he essentially told me "Try to lower the limit on xyz card and progressively apply for lower increase instead 2x you were asking and do this 3 months from now".

          This is the kind of answer that I think most people would be satisfied with. A "Computer Says No" is an annoying answer however true that may be and reflects badly on the business but hey, then again, I am conscious that we need them more than they need us.

          With regard to discrimination, of course you won't see that sort of algorithm. If you do, I am sure you will be the first to be the whistleblower and flamed the industry come hither.

  • vorsprung on 11/12/2023 - 20:25
    +1

    I've been knocked back for a phone plan with Virgin before, despite having a decent job, no debt at the time, and a home loan deposit in my savings account. They wouldn't give me a reason; computer says no. I freaked out, worried that my identity had been stolen and got my credit file from every agency. Nothing wrong with it. Probably for the best really, I just bought the phone outright and went on prepaid. I really feel that either I screwed up the application, or Virgin did. I don't know anyone that's been knocked back for a phone plan…

    Also knocked back from Westpac for a credit card, had my home loan with them at a time. Same story, computer says no.

    I'm of the opinion that Westpac could see that I applied for an ANZ card a year prior at $15k, kept it for 3 months (to get the bonus points) and closed it. Someone probably looked at that and said "this guy is just here for the free points"… which I was. Then they use the credit report as a scapegoat.

  • azero on 12/12/2023 - 09:14
    +1

    They most likely use HEM to calculate your expenses.

    If you can find out HEM applicable for you and put your expenses as just above that it should help IF the rejection was due to low expenses.

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