Woman denied credit due to blacklisted mortgage company: Bank of America

There have been literally hundreds of stories in the media locally and nationally about the current credit crunch and how everyday consumers are coping.  Many of these stories have focused on American Express, perhaps the most ruthless of credit card companies when it comes to the reasons it denies credit to good customers. 

Yesterday evening, a story concerning American Express denying credit based on a customer’s mortgage company aired on San Diego’s ABC affiliate, Channel 10 News. The story focuses on Debbie Berger, a resident of El Cajon, California. 

Despite Debbie’s relatively good credit history and a FICO score of 784 (Experian PLUS score), she was denied a credit increase for having a mortgage with Bank of America, apparently one of the companies on American Express’ secret blacklist.  The only reason given in her denial letter was: “We have found there is a credit risk associated with customers who previously had residential loan(s) with lender(s) as indicated in your Credit Bureau report.” 

Representatives from American Express denied that Bank of America was the problem even though that is what their letter stated, and that their decisions are primarily based on a cardholder’s overall debt level relative to their financial resources.  Even if Debbie’s ratios are too high, which I doubt, the reason stated concerning her mortgage is not tenable. 

In short, American Express doesn’t understand that the delinquent actions of others who patronize a certain mortgage company, a mortgage servicing company, or any other merchant for that matter should not be used to assess one’s credit worthiness.  American Express’ emphasis on the word “primarily” doesn’t make the decision any less despicable or any more ethical.  As this story spreads and people become more outraged, I am confident that such practices will eventually be outlawed and American Express will be held fully accountable. 

Comments

[CreditMattersBlog.com]

Kevin, and you keep up the great work as well. One day at a time.

Take care.

[Kevin D. Johnson]

As always, Marcus, you are on top of things. An "inflated" score would make the reporter's point more powerful, but one must be careful not to be deceived. I will make a note of that in the article now. A few people have addressed the problems with certain stories in the media, like Dr. Lahm of ChangeInTerms.com. I suppose it's our burden of perspicacity, and responsibility to point such things out. Likewise, keep up the excellent work with CreditMattersBlog.com.

[CreditMattersBlog.com]

And to be clear: the PLUS score is developed by Experian. I was not suggesting that the woman pull her Experian FICO score (since it is no longer available to consumers). Equifax FICO or TransUnion FICO would have sufficed.

Keep up the great work, Kevin.

[CreditMattersBlog.com]

Kevin, did you notice in the KGTV-10 piece that the "FICO" score was really just the Experian PLUS score? The reporter should have caught that. She should have had the woman pull her FICO score through myFICO.com before the piece aired.

As for the rest of the story, throw it in with the rest of the American Express pile. These stories continue to mount.

[Timothyphx1]

Amex does not like my Mortgage company either-

Homecommings-

I am doing a Re-fi right now and Amex has refused to provide a list of their approved lenders.

[Holly]

Seems media reporting is sparatic?

The media is not "honing in" on the fact that thousands of credit scores are coming down because of this and where will the economy be when the consumer cannot purchase?

That's the CORE of this problem!!