Personal Finance

Line of credit increase denial TD bank

  • Last Updated:
  • Jul 22nd, 2021 7:48 am
[OP]
Member
Nov 10, 2007
400 posts
92 upvotes
toronto

Line of credit increase denial TD bank

Hi.
I applied for an increase to my line of credit to $50000 have $10000 limit. Went in person to Finnish advisor at TD. Have a long standing reputation with td 19yrs and have Been having my pay direct deposit through them for 19 yrs. Also owned a house with them.

The advisor looked through my file. Said there was a fraud alert and they have to do a new application. So was asked my income (Even though it is deposited to my chequing no weekly) was also asked for iD.

The Advisor then counted mu bi weekly pay amount on their system and said that there is a $7000 difference in the amount I mentioned and that
I need to send a copy of my pay stub and my t4s for the last 2years to confirm my income.

I complied with the request and ended up with a $2000 dollar difference then what I stated on my t4. All along the way I was assured that the credit limit increase will be approved. I even offered to close some of my credit cards with 0 balance and was told that I don't need to.

A week later I was told that a decision had been made and that they won't give me a credit increase $0??? And that I have too much available credit and not enough assets.

I have never been denied credit and am perplexed. Also was confusion assured that I would get the increase.
25 replies
Deal Fanatic
Apr 5, 2016
5504 posts
3918 upvotes
Calgary/Vancouver
Too much credit is a valid reason for denial.

Not sure on the income as I haven't reviewed it, but as lenders, we do have to factor in if there's any discrepancies. A lot of "part timers" would beef up a paystub by working 40 hours a week and show that so we can use higher income compared to 2 years average. But we have to do our due diligence, so we check bank statements and the YTD amounts on paystubs.

IIRC, typically for line of credit applications, they want something like a 2:1 net worth. $50,000 would need something like $100,000 of assets. Depending on the bank, some may be able to use real estate, some liquid assets only.
[OP]
Member
Nov 10, 2007
400 posts
92 upvotes
toronto
My argument is that I should have been advised to close my open credit card before applying for the line of credit increase if it would be declined. I offered to do this and said it wasn't necessary as I would get approved. I worked for the same employer for 19yrs. Currently working full time for the past 12yrs. Also weird that they wouldn't increase my credit limit at all. My Annual income is $60000.
Deal Addict
User avatar
Mar 10, 2018
4156 posts
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centre of universe
supplementking wrote: My argument is that I should have been advised to close my open credit card before applying for the line of credit increase if it would be declined. I offered to do this and said it wasn't necessary as I would get approved. I worked for the same employer for 19yrs. Currently working full time for the past 12yrs. Also weird that they wouldn't increase my credit limit at all. My Annual income is $60000.
change the bank. Take business where you can get it. No need to bank at place where it gets denied.
TD is getting on nerves lately.
[OP]
Member
Nov 10, 2007
400 posts
92 upvotes
toronto
Yeah was thinking that but have long 2 decade of history with them. Hard to leave as a big chunk of my credit history is tied with them. Also upset that I was denied and that it will be a black mark on my credit report even though I have great credit. Any idea how long it will impact my ability to get credit?
Deal Fanatic
Jan 19, 2017
5595 posts
3131 upvotes
supplementking wrote: My argument is that I should have been advised to close my open credit card before applying for the line of credit increase if it would be declined. I offered to do this and said it wasn't necessary as I would get approved. I worked for the same employer for 19yrs. Currently working full time for the past 12yrs. Also weird that they wouldn't increase my credit limit at all. My Annual income is $60000.
I think it has to do with the fraud alert. So they don’t trust everything you said.
Sr. Member
Feb 28, 2014
672 posts
798 upvotes
supplementking wrote: Yeah was thinking that but have long 2 decade of history with them. Hard to leave as a big chunk of my credit history is tied with them. Also upset that I was denied and that it will be a black mark on my credit report even though I have great credit. Any idea how long it will impact my ability to get credit?
How would it leave a black mark? It's not a derogatory mark (or negative information) if you were rejected on a loan. Lenders only report those if you're late on payments, have a judgment against you, you declared bankruptcy or items were sent to collections. You were simply loan shopping. Just shop your LOC elsewhere.

Here's more information about negative information on credit reports: https://www.canada.ca/en/financial-cons ... .html#toc1

You being with the bank for 19 years mean jack squat a lot of times these days unless you can bring significant business to them. If TD don't want to do additional business with you, go elsewhere. I really don't get this whole absolute loyalty to an FI thing that so many Canadians have...
Deal Guru
User avatar
Mar 23, 2008
12633 posts
9240 upvotes
Edmonton
supplementking wrote: My argument is that I should have been advised to close my open credit card before applying for the line of credit increase if it would be declined. I offered to do this and said it wasn't necessary as I would get approved. I worked for the same employer for 19yrs. Currently working full time for the past 12yrs. Also weird that they wouldn't increase my credit limit at all. My Annual income is $60000.
You make $60,000 a year, and you were asking for a $50,000 unsecured LOC? I would have been more surprised if you got it than surprised you didn’t get it.

C
Deal Fanatic
May 22, 2003
7081 posts
3977 upvotes
Vancouver
Why are you trying to increase your unsecured loc? Wouldn't you have a better rate in a HELOC?
Deal Addict
May 16, 2017
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CNeufeld wrote: You make $60,000 a year, and you were asking for a $50,000 unsecured LOC? I would have been more surprised if you got it than surprised you didn’t get it.

C
I'd agree - $60K income and no owned home presents a very high risk for a $50K LOC to lenders these days.
Deal Fanatic
Apr 5, 2016
5504 posts
3918 upvotes
Calgary/Vancouver
supplementking wrote: I don't own a house anymore
If you don't have any other assets to back up the application, you're not gonna get approved as they usually want 2:1 or sometimes 3:1 assets.

They probably blamed it on available credit as it's nicer than saying you don't have assets.

Only exception to this I've seen is professional line of credits.
Deal Addict
User avatar
Sep 9, 2012
4715 posts
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Oakville, ON
supplementking wrote: Yeah was thinking that but have long 2 decade of history with them. Hard to leave as a big chunk of my credit history is tied with them. Also upset that I was denied and that it will be a black mark on my credit report even though I have great credit. Any idea how long it will impact my ability to get credit?
There’s no “black mark” on your credit report to worry about. Other lenders in future will see that TD did an inquiry but they won’t know why TD did the inquiry and they won’t know if TD declined you or not. The inquiry could have just as easily been pulled for a request on a $1,000 overdraft protection as it was for your LOC request. I wouldn’t worry about it unless you’re going to make several more credit requests in the next few months. Otherwise, a single inquiry has only a small impact on your score and the impact lessens with each passing month.

As far as the decision goes, it’s seems like a reasonable decision given your income, other available credit, and net worth.

That said, it sounds like the Rep you were dealing with did a very poor job of managing your application through the process and managing your expectations. They NEVER should have led you think you’d be approved. Very bad service to have even hinted that you’d be approved as it only sets you up for disappointment. The Rep should have stuck to explaining the process, explaining requirements, and advising on status but all without saying you’d be approved. This is where you have a legit beef with them.
[OP]
Member
Nov 10, 2007
400 posts
92 upvotes
toronto
Have like $56000 of available credit spread across 5 credit cards owing $2000 on one. Should I close all credit cards except one and then re apply in a month or two?
Deal Addict
Apr 5, 2007
1619 posts
794 upvotes
Canada
supplementking wrote: Have like $56000 of available credit spread across 5 credit cards owing $2000 on one. Should I close all credit cards except one and then re apply in a month or two?
Perhaps I am confused - You have $56,000 across 5 credit cards, plus $10,000 on your LOC. In total, you can already borrow $66,000 (which exceed your income).
You are asking for another 40,000 increase, bringing the total to $106,000, which is 1.8X more than you make in a year ... Black Question Mark Ornament
Deal Fanatic
Jan 21, 2014
5832 posts
3244 upvotes
supplementking wrote: Have like $56000 of available credit spread across 5 credit cards owing $2000 on one. Should I close all credit cards except one and then re apply in a month or two?
Was $2k the current balance on one of the cards which you will pay off or it was a carried balance? If it's the latter one, shouldn't you use LOC instead of the CC for lower interest rate?
Deal Guru
User avatar
Mar 23, 2008
12633 posts
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Edmonton
supplementking wrote: Have like $56000 of available credit spread across 5 credit cards owing $2000 on one. Should I close all credit cards except one and then re apply in a month or two?
Nobody can answer that because nobody knows what you’re trying to accomplish. But what I will say is that closing your credit cards won’t guarantee you get the LOC you’re looking for. And there’s no guarantees that if you close some cards that you’ll be able to reopen them if you don’t get the LOC.

Basically, lenders do whatever the hell they want, based on algorithms that most of us aren’t privy to.

C
Deal Fanatic
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Aug 24, 2016
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The Prairies
cahk wrote: Perhaps I am confused - You have $56,000 across 5 credit cards, plus $10,000 on your LOC. In total, you can already borrow $66,000 (which exceed your income).
You are asking for another 40,000 increase, bringing the total to $106,000, which is 1.8X more than you make in a year ... Black Question Mark Ornament
I suppose you are confused, because I make 44k a year, and have just over 140k in available credit across all cards.
Banks are always willing to dole out more if you’re responsible with it.
Although I think OP was shooting for the stars, asking for a 400% increase.
Member
User avatar
Feb 16, 2014
377 posts
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coolintheshade wrote: I suppose you are confused, because I make 44k a year, and have just over 140k in available credit across all cards.
Banks are always willing to dole out more if you’re responsible with it.
Although I think OP was shooting for the stars, asking for a 400% increase.
Betting you have other assets! Winking Face house plus mortgage... investments, etc.
Deal Fanatic
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Aug 24, 2016
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b33zlebub wrote: Betting you have other assets! Winking Face house plus mortgage... investments, etc.
You wouldn’t be wrong, but my only point was, your available credit can exceed your annual income by lots, depending on the person.

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