Hello I am currently on a credit couseling program, which I have been extremely happy with. One of the rules of such, is that you must not apply for any credit during your repayment of credit. I have followed that faithfully and have even asked questions to ensure I do NOt do so. In fact, this rule has really helped me to stay away from creating new debts and learn new behavior. However now I have a problem. I just received a letter, from my bank, stating I was denied a loan. I did not apply for a loan. (Do be mindful I am on some heavy medication for pain). I had to think carefully and the only thing I can come up with is, I did talk to them recently about changing something, and I was informed about a free plan to get overdraft protection, on my current account, which would reduce any fees if such a thing occurred. I have not had such an occurance for a couple of years but I thought, hmmm, maybe this would be prudent to ensuring that credit payment will always be covered. The main reason I did it, then the fact the $38 overdraft fee would be reduced to $2. There was also mention of a $200 protected limit. I was told I totally qualified due to the average balance I have plus the type of account I have. Now I wonder if doing so has caused this loan decision? I am afraid this might affect my current credit counseling program, which I never intended to do in any way. In no way was I told a credit check may occur, I was simply told I qualified for this free service because of my history with the bank plus the type of account. Do credit decsions or requests like this show up on my credit report? And what should I do? Should I contact my credit counseling company and explain this now? or would doing so alert them unneccessarily? I just dont know what the best action would be here. I do NOT want to lose where i am in this program. This was a hard decision but the right one. thank you
It sounds like you were offered "overdraft protection" which is just an unsecured credit line that is attached to your checking account. If you overdraw your account, instead of paying a fee, you automatically get a loan to cover the overdraft. It will show up as a credit inquiry on one or more of your credit reports. I don't know how the credit counseling services work, but you might want to explain what happened so the credit inquiry doesn't get you into trouble. It's not always clear from listening to the fast-talkers on the phone that you're actually applying for a loan when you're offered this "protection."
I would definitely call and give them the heads up as to what is going on. That way they do not feel like you are trying to get away with something that you are not. I think being up front is the best way to go in this situation. Good luck!
response to advice Thank you, both of you. You are indeed correct, as I had no idea I was applying for any credit line. In fact, a few years ago, on the same type of bank account, I pay extra for mine for added privileges, I had an automatic $200 dollar guarentee on all my transactions, so I was covered in case there was an issue. This came with the account. My thought process was this was the same thing, since it was "free" and I immediately qualified and there was no indication I was applying for any credit. And again, what really drew me in was that $2 dollar fee for any overdrawn checks versus the $38. (Man, that can kill your finances quickly!-hence why I have learned to be more prudent on checking my account on a more regular basis versus once a month.) This guy was wonderful in service, but I am sure he gets some kickbacks for added features. I have been automatically shredding any credit offers, of any kind, and sticking to my budget guns lol. I actually would love to go back in time so this would not have happened. In fact, one of the things I set up was an automatic withdrawal into a savings account, monthly to begin building up some savings, I thought that would be used in the protection. I wish I could remember alll the exact verbage. I am honest and felt your advice to contact them was excellent, even though I am nervous about the situation. At least I can prove the medication. Anyway I attempted to call CCS today, but they only had 10 minutes left on the clock so I will call them tomorrow to explain. Hopefully they will not hold this against me. My prayers will be on that. I will let you know of the outcome. Kelley
I agree with the others. Be honest, tell them what happened and that you didn't intend to apply for credit--in fact, you thought it was something that would help you.
