"Too Much Committed Credit"

Ben1982 · 5 November 2007 at 10:43PM

Hi All,
A couple of a weeks ago I got a phone call from the Halifax, saying that as a thank you for taking a mortgage out with them, they were offering me their Credit Card with 15 Months 0% on Purchases and 6 months 0% on BTs.

I was holding off on getting any new cards until my existing 0% deals were coming to a close (April and August respectively), however since they were calling up I thought it'd be a done deal, and said yes to the card, and the guy went through the application on the phone, and said that I would receive the forms to sign within 7-10 working days, which I could return and then get the card. They said that they'd need to perform a credit check etc, which I was fine with, and he asked what my current salary was to ascertain credit limit.

However today, I get a letter saying "Thank you for your application, I regret...yady yady yada.... The information that you have provided indicates that the level of credit you are currently committed to, in relation to your stated income, is higher than our present lending criteria allows."

And also "If you have any additional information that you wish to be considered please contact us at the address below".....

I have about £10500 on credit cards (all 0%), and about £9500 in savings, plus my current account, is always in credit, and usually has at least £500 in, and I'll be making up that other £1K by the new year (well in time to be able to pay off all the debt months in advance if needed).
I was hoping that the 15 month thing would come through the post with a pretty good credit limit so it would tide me over for a while, so I could keep putting the money in savings.

Is there anything I can give them for them to reconsider it (find it a bit off that they call me as a thank you and offer me a card, and then turn round a week later and say "sorry we take it back", I know it's well within their rights as "responsible lenders", but just seems a bit silly).

I would love to carry on my slow stoozing, but I wasn't planning on making any more applications before I cleared off at least one of the other ones (possibly to get a repeat deal).

Any advice would be appreciated..

Cheers

Ben

PS: one of the reasons why my Debt vs savings is ~£1K out is that the other month I did an overpayment to my mortgage of £800, rather than overpaying by £100 each month. (as a lump sum was going to give me the better benefit, at still a low risk). (the other reason is one of my cards is currently covering a loan I paid off - for around £3k, which as you can see is nearly balanced out into a full blown stooz).

Milarky · 8 November 2007 at 10:38AM

One hit's this buffer with HBOS more often one does with other credit card issuers I find (RBS are twitchy too). It seems that they don't like you have more than 100% of income on unsecured credit like other cards. I've been caught and simply had to wait, and bring my net position down to below that figure before applying again.

Your mortgage with seem shouldn't affect this decision I would have thought since they are the mortgage provider so they would regard this as secure and fully offset against the value of your home. Ironically it might appear that if you were to put even more on the mortgage and use that to pay down existing credit card balances they would be prepared to give you a card - since then you would not appear (to them) to being 'over committed'.

Just how high is the CC debt to income (as a % percentage) at the moment. What is the multiple of mortgage to income and what percentage is the equity in your home?

Don't be too discouraged. If you apply again in April or May next year (when you have repaid the card you mentioned) they should be more accommodating. But your alternative to waiting is to look for an alternative provider that aren't as fussy as HBOS (Capital One for instance, or MBNA?)

Ben1982 · 8 November 2007 at 11:53AM

Hi, Thanks for the reply.

CC Debt to Income is only about 30%, my total debt to income (inc mortgage) is only about twice my annual income. (My only real debt is my mortgage, and about £1K on cards).

I'm on a shared ownership, of which I own 35% of. LTV of the share is about 80%.

I'm guessing it probably looked bad that I went from last year paying off my credit card each month in full, to going to 3 cards, paying only the minimum. (all 0% cards)

I'm not discouraged, I was planning on waiting until March/April/May sort of time to get a new card, however since they called me, I thought it'd be a done deal, and went for it.

I think other stoozers have appealed against the decline, and had success, however I'm not sure of those details.

Milarky · 8 November 2007 at 5:53PM

Ben1982 wrote: »

I think other stoozers have appealed against the decline, and had success, however I'm not sure of those details.

Lloyds yes. NatWest yes. But I'd like to hear their experiences with HBOS because they weren't budging when I tried to say I really had all this money - they were only looking for the income/debt ratio to come down to less that 100% (maybe they don't even score all people at 100% and that's just the limit for the better credit scoring individuals?)

caver · 9 November 2007 at 6:49PM

I work for halifax on this campaign - when they went through the application did the advisor say that the case would be referred or that it was successful?
Halifax only give out cards to the top 10% of the population who have excellent credit ratings. The credit limit is determined usually by what 35% of your income is however if you have a number of cards then they will take this into account as well.

Ben1982 · 9 November 2007 at 11:06PM

caver - they didn't say, all i was told on the phone initially was that the forms to sign would be sent in the post, and I would get the credit limit when the card comes through, nothing about it being referred etc.

However, I called them on Wednesday (I think) to talk about it, the woman i spoke to obviously didn't have many people asking to talk about their rejections because, she first of all said for me to ignore the letter because they didn't need any more info as it had been refused. And then asked me if I was calling for the reason for it to be rejected. Eventually she said that she had passed it onto their Specialist Lending team, and they'd give me a call.

Got the call today, the guy said that the reason why it got rejected was because the address was wrong and there was no credit file for the address they had. Which is understandable, because some places' Postcode data come up with the wrong post code (the street to the side of the property), and he could see instantly that I knew what he was talking about (however this is the only card I've had declined because of that).
Anyway, he said he's had corrected that, and the application has now been successful, and the Ts&Cs will be sent out in the post for me to sign.

He also told me what my credit limit would be around, which is among the lowest of my credit limits, but will still be enough for me for now. And if I get some BT Offers from my expiring cards in April, then I can probably shift any debt from this card onto them.

"Too Much Committed Credit"

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