Personal Finance

High net worth but low credit score advice pls

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  • Jun 9th, 2016 9:06 pm
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[OP]
Newbie
Dec 11, 2014
4 posts
Edmonton, AB

High net worth but low credit score advice pls

I'm hoping the people here can shed some light into my credit situation. Basically, I applied to Tangerine for their 4% promo cash back credit card and got denied, and was told that it was because of my credit.

I went to Transunion and got my report and found my credit score to be 704 which is on the low end of "Fair". (The range is 300-900, fair is 700-749).

I have 4 credit cards with the following limits:
1. MBNA MC (for personal expenses): 33,900
2. MBNA MC (for business expenses): 10,000
3. Amazon Visa (for travel/ForEx only): 7,000
4. PC MC (for PC stores only): 10,000

My credit report goes back to 2006. May have had 1-2 missed payments over the entire time, but certainly not recently. All accounts are in good standing. My 2 MBNA cards and the PC are new as of 6 months ago. (I previously had the old MBNA and PC, upgraded to World Elite).

My credit utilization averages $15k a month. I keep high credit limits because occasionally I make big purchases at once. I'm in the midst of building a house, so I might put down $20k a one time for some construction expense. If I go on vacation, I might spend $10k at once at PCTravel.ca. I keep NO balances, and the cards are paid off every month. As you can see, my credit cards for cash back only.

My income is over $600k a year. I have over $2.5m in liquid investments (ETFs, mutual funds). I have a $850k construction mortgage on my house. No loans of any other sort.

I want the Tangerine card because I'm buying about $40k worth of furniture, so the 4% back would be awesome. If not, I'll use MBNA for the 2% back.

Is the low score because I have too much credit available to me, even though I haven't had any problems maintaining the cards? Should I decrease some limits? Is it because I have recently upgraded 3 of my credit cards in the last 6 months? Do credit agencies care about your net worth / investable assets?

I know this is 1% problem and I'm not looking for pity. I just want to figure out my credit report. RFD has been great in this respect. Thanks in advance.
18 replies
Deal Guru
User avatar
Mar 23, 2008
12217 posts
8629 upvotes
Edmonton
Could have been because the majority of your credit has come in the last 6 months (50k+)...

C
Deal Addict
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Mar 3, 2005
1030 posts
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Mississauga
I think the score report has a section that explains the reason for the score - what does it say?
Deal Addict
Aug 16, 2009
1400 posts
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Toronto
Trying to understand how you're not able clear the credit with such a high income?
Deal Fanatic
User avatar
Oct 1, 2011
6337 posts
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Holy shazam you're rich.

But yeah I think it has something to do with the recent new credit cards. Umm....even with the 4% on 40k worth of furniture... it's really not worth it, considering your finances.
Sr. Member
User avatar
Apr 22, 2014
523 posts
257 upvotes
Edmonton, AB
peanutz wrote: Holy shazam you're rich.

But yeah I think it has something to do with the recent new credit cards. Umm....even with the 4% on 40k worth of furniture... it's really not worth it, considering your finances.
Nothing wrong with saving $800 regardless of your finances.
Sr. Member
Sep 24, 2013
964 posts
674 upvotes
Ontario
philland wrote: Nothing wrong with saving $800 regardless of your finances.
The first three months would be 4%. 4% of $40,000 would be $1,600.
Sr. Member
User avatar
Apr 22, 2014
523 posts
257 upvotes
Edmonton, AB
buddshek wrote: The first three months would be 4%. 4% of $40,000 would be $1,600.
Thanks bro. I was obviously talking about the difference between 4% and 2%.
[OP]
Newbie
Dec 11, 2014
4 posts
Edmonton, AB
Thanks for the initial thoughts. Perhaps as you say the recent changes in credit cards, even though the credit amounts are the same, caused a credit downgrade.

I have had 5 inquiries total to my credit in the last 12 months, so maybe this is a factor, although this doesn't sound like a lot (1x Tangerine, 2x MBNA, 2x PC Financial).

I looked at the TransUnion report more carefully. It says that income is not considered in the scoring process. Interesting that you mentioned the bank thought I was reporting a fraudulent income. When I applied to MBNA, I told them what my real income was, but they thought I made a mistake. So I just told them $400k and they approved me. I told Tangerine the same, so that might be a bad call on my part. I have always found it interesting how they don't actually do anything to verify your income.

The credit report didn't give any specifics about my report, but listed generalities about credit score.

Agreed: I figure a few minutes to apply for a credit card to save $800 would be a good use of time.

I think Tangerine can tell they're not going to make money from me, so that's why I got rejected :)

Anyhow, I got my wife to apply, so maybe we might get the 4% regardless.
Member
Mar 9, 2015
218 posts
91 upvotes
Aldergrove, BC
I applied with Scotia (who owns Tangerine) November 2015 for the Amex Gold card they have. I was conditionally approved for $5k pending income verification but even after sending in pay stubs they reviewed the file and denied the app (around 700 credit score)

Fast forward to April 2016 and they pre approved me for a Scene Visa with a $7500 limit with no verification.

If you are buying $40k of furniture I am sure most places would knock off 5%+ if you offer to pay cash
Deal Fanatic
User avatar
Nov 2, 2013
5533 posts
1416 upvotes
Edmonton, AB
709 should be more than enough For most purposes. Most lenders look for 650+. I was approved for a mortgage when I was 22 with 659 but I couldn't even get a loan for 4300$ of furniture because of debt to income ratio (didn't need the loan, but it was 0 interest so thought OK why not)

Perhaps you were declined because they deemed you to have too much debt (debt to income ratio too high) or your income wasn't verifiable ?
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Deal Addict
Aug 31, 2014
1488 posts
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YVR, BC
use your liquid cash to pay all your debt on cards and in 1-3 months your score should be up considerably......with all the cash and income - why miss payments?
Deal Fanatic
Apr 16, 2007
8001 posts
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Financial District B…
What was your disclosure as employment for that income?
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Sr. Member
Mar 15, 2011
533 posts
171 upvotes
Toronto
Based on what the OP says, the credit limits he has are less than 10% of income.

This does not make sense to me....my credit limits are around 35% of my modest income. Why such a disparity. Do I have too much credit? i use less than 1% and don't carry balances
(No mortgage or other debt currently...)
Deal Addict
May 15, 2013
1771 posts
478 upvotes
Montreal
UrbanPoet wrote: MAybe you got declined because they think its fraudulent reported income amount.
Or maybe because Tangerine is not interested in paying 4% to someone makes 600K per year? As he says, 15k per month ...
Banned
Mar 11, 2016
2081 posts
866 upvotes
your 2 issues are simply total amount of unsecured limits in a short period of time, high usage , and number of inquiries....15k/mth is much higher than average and accompanied by high amounts of available credit raises red flags...income not relevant
Deal Fanatic
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Nov 23, 2005
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iamthebest wrote: Or maybe because Tangerine is not interested in paying 4% to someone makes 600K per year? As he says, 15k per month ...
Why wouldn't they? They make money by charging merchant fees. Sure, initially they'd be taking a 'loss' by paying out 4% CB, but their hope is that in the long run they make it back plus make more through high spending/balance carrying (which obviously won't apply to OP).
Deal Addict
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Sep 4, 2005
2922 posts
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Toronto
Chip me some of that 600k and i'll let you use my tangerine CC :D

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