Question
I signed up for a checking acct with Bank of America, after I explicitly told them not to issue me a credit card, they issued me a credit card with a $7500 credit limit. I phoned and complained, and explained the reason why I was so upset was that opening and closing an account could affect (my otherwise pristine) credit rating. They told me there would be no effect. Is this true? I'm thinking about reporting them to the appropriate governmental regulatory agency for extending credit without my permission- any suggestions for which agency (or am I being unreasonable here?)
If there is no effect on the credit rating, I will get a AA citibank visa, charge $250 and cancel it for the 20K miles!
Answer
The fact that you opened a line of credit--even if you close it immediately--would get reported. Since you're actually planning to charge something, it pretty much assures you that the card will appear on your credit report. Now, I don't know how Fair Isaacs factors the various credit cards into your score.
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A couple of questions.
First, are you sure this is a credit card, and not a debit card? You mentioned a $7,500 credit limit, which does indeed sound like a credit card. Some places (like Merril Lynch) have debit cards that look a lot like credit cards, however.
Second, did you sign anything authorizing them to do a credit check on you? Check everything you signed while opening the account. The "hard pull" of your credit report is recorded--i.e., the fact that you actually applied for credit, independent of whether or not they gave the credit to you. If you already had a credit card with them, however, it's possible they granted you a new one without checking your credit report.
Anyway, I wouldn't panic if I were you. Based on things posted in this forum, it sounds like even people who heavily churn credit cards for sign-up bonuses only get dinged 30-40 points on their credit reports, which is not that significant.
Also, a closed credit card probably stays on your credit report for at least two years. It may be that closing the credit card will actually hurt your credit rating more than keeping it open, because if your total outstanding debt is a smaller fraction of your combined credit limits, this looks good. Also, credit cards that have been open for a long time look good and raise your rating. Thus, I would recommend keeping the card if there is no annual fee.
Answer
BOA does a hard pull when you open a checking account with them anyways, if you are not a previous customer, so you likely authorized them to do this anyways. Do you know if they did an additional pull? If it was all on the same pull, then there was no harm done in getting their creditcard - and it likely helps as it lowers your utilization.
If it wasn't on the same pull, then you could fight them for the inquiry because not only did you not authorize it but you forbid them from doing it. Likely not worth the trouble of disputing a single hard pull though, just one won't do much to your score.
I've never heard of opening a BOA account and having them apply for a credit card for you at the same time though, but I opened my account online and not at a branch. Their debit card is pretty obviousally a debit card - as it says both "Platinum Check Card" and "DEBIT" on it. There's no additional pull for this card, its part of your checking account.
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The ding you are going to get for signing up for a credit card isn't that much. I just received my credit score after having churned a few citibank cards -- the dings I got were:
1. Too many accounts with balances (which is not correct)
2. No recent revolving balances (which is true, I pay each month)
3. Length of time accounts have been established (which I suppose is true if closing the account doesn't offset opening it)
4. Too many accounts recently opened (same comment as 3)
The inquiry itself seemed to not be tracked as a factor.
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The inquiry itself seemed to not be tracked as a factor.
Not so for me: "too many inquiries in the last 12 months". I also got "time since accounts opened too short".
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Not so for me: "too many inquiries in the last 12 months". I also got "time since accounts opened too short".I didn't get the "too many inquiries" ding. Perhaps that is because Citibank didn't do multiple inquiries for each card since I had done them in rapid succession. My understanding is that they don't repeat the credit check if they have a recent one on file.
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getting a cc affects your credit score as your overall credit available has gone up relative to your pool of available credit prior to cc opening, the effect is generally minor.
Now if you max up that just opened up card, you have changed your ratio of your available credit and the effect can be major.
as long as you keep your oldest CC (as length of credit is a factor with FICO), pay your bills on time and do not run up the balances, you can still have pristine credit. One of my bank clients recently had a customer with 22 CC yet his FICO was 800+
I personally have opened two CC's to take advantage of the nice promos (AA's 25,000 bonus miles being one of them). My FICO is down a whopping 6 points from the last time I checked it, so no big deal. In 12 months I'll close one of the cards and keep the other.
The other thing to consider is: if one is NOT thinking of obtaining any new credit or new/rewriting insurance in the next 12 months, who really cares if your score goes down a bit? Point being, if you are not using your pristine credit to get more credit or new/rewriting insurance it does not matter if your score takes a temp ding.
I have a buddy who drives himself insane as whenever he checks his FICO score, it is not where he wants it to be. I ask if he is applying for any new credit. "Well no, but my score!!" :rolleyes: :D
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Answer
BofA could not have opened a credit card for you unsolicited. This is illegal. You must have either signed something when you opened the checking account, giving them permission to open a card for you as well, or it is a debit card with an overdraft. Check it.
Also, the Fair Credit Reporting Act (FCRA) does not allow a company to re-use a credit report - even within the same day. So, if they did a pull on your bureau to open the checking account, then they had to do another pull to run a credit check to give you a credit card. The only way that a company can use FCRA data to cross-sell to you is if they have "permissible purpose" and have given you the opportunity to opt-out of sharing data. I don't know BofA's corporate strcuture but I'm guessing that the retail bank side is a different legal entity than the credit card issuing side (again, this is an assumption) and would mean that they are affliates and must give you that opt-out.
But the biggest thing, they cannot send you an unsolicited, open credit account. You either signed up for it when you opened your checking or it is a debit card.