An online bank did not want this reader’s deposit. Now what?


Dear Liz: I recently tried to open a one year high yield certificate of deposit in an online bank. I already have a CD with this bank, but when I went to submit the form for the new account, I got a message on the screen that the bank had declined my request. I called the bank’s customer service, but the rep said she couldn’t give me any reason why they declined my request.

I checked my three credit reports and everything is in order. The only thing I can think of is that I recently had a balance on a credit card that slightly exceeded 30% of my credit availability, but paid off in full. I did some research online and another reason could be that withdrawals from other bank accounts show up on my credit report. I recently made regular withdrawals from one of my money market accounts.

Why would a bank refuse a customer to give them a large sum of money, so they could lend it out at higher interest rates and make money? If I knew the reason for the refusal, I could fix it. Is there a Federal Banking Rights Organization that I can appeal this denial to?

Answer: You can file a complaint with the Consumer Financial Protection Bureau, which promises to work with your bank to resolve your problem. You can also lodge a complaint with the bank regulator, but there is no guarantee that you will get a response.

The denial was probably not due to the information in your credit reports. A bank may check your credit before allowing you to open a new account, but you won’t be denied for using more than 30% of your credit limit. Bank transactions are generally not recorded in your credit reports, so this would not be grounds for denial either.

The bank is required to send you an “adverse action” notice if it used your credit report or another consumer database to deny your request. This notice should explain the reason and the database used.

It is possible that you experienced a technical problem or that you tried to deposit more than the bank allowed for this account. Another possibility is that there were typos or errors in your online application. Either way, the CFPB complaint should prompt a clearer response from the bank about what happened and what you can do to fix the problem.

Dear Liz: If I pay off my credit card and have a zero balance, will my credit score go up a bit?

Answer: This depends on, among other factors, how much of your available credit you were using on that card. The closer you were to maxing out — meaning using up most or all of your available credit — the more dramatic the improvement you could see.

But your credit scores also depend on a number of other factors, including the length of your credit, the number of open accounts you have, the amount of available credit you use on those accounts, the date of your last credit application and if you have any negative notes, such as late payments, on your credit reports.

Generally, credit scores respond favorably if you are only using a small portion of your available credit. People trying to achieve the highest scores usually try to keep their credit utilization below 10% of their credit limits.

Dear Liz: Can a person who remarried claim survivor benefits from a deceased ex-husband?

Answer: It is possible, if the marriage lasted at least 10 years, that the divorce took place at least two years ago and that she remarried at age 60 or later.

Divorced survivor benefits can be up to 100% of the former spouse’s benefit. The amount would be reduced if the former wife applied for it before her full retirement age, which is currently between 66 and 67. (Survivor benefits could be further reduced, or even eliminated, if the ex-spouse receives a pension from a job and contributes to Social Security, under “government pension offset” rules.) If the ex-wife won a Social Security benefit, she would receive the higher of the two checks rather than both amounts.

The rules for divorced survivor benefits are different from those for divorced spouse benefits. Divorced spouse benefits may be available while the ex-husband is still alive, but only if the ex-wife has not remarried. In addition, the divorced spouse’s benefit amounts to 50% of the ex-husband’s benefit.

Liz Weston, Certified Financial Planner, is a personal finance columnist for NerdWallet. Questions can be sent to him at 3940 Laurel Canyon, #238, Studio City, CA 91604, or by using the “Contact” form on


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