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  • FIRST POST
    • chris9393
    • By chris9393 14th Mar 17, 11:21 AM
    • 46Posts
    • 69Thanks
    chris9393
    Declined credit card - excellent credit score?
    • #1
    • 14th Mar 17, 11:21 AM
    Declined credit card - excellent credit score? 14th Mar 17 at 11:21 AM
    Hi,

    I was wondering if I could get some advice from this forum. I was looking to apply for a new credit card, I currently own 2 at the moment, one which has been fully paid off and haven't used in about a year and the other with an outstanding balance of £1,500, however this is a 27 month 0% purchases card with another 16 months left. I've never missed a payment and currently have excellent credit score according to noddle.co.uk and experian.co.uk.

    I used 3 different eligibility checkers online to get an idea of what credit cards were on offer all to which suggested a Halifax card with 0% interest on purchases for 30 months. I decided to go ahead and complete the online application only to then find out my application was rejected.

    I'm currently 23 years old, been in current full time employment for 2 years with an annual income on £32,000. Still living at home with parents and no one financially dependant on myself.

    The only 'debts' I have to my name is £1,500 on CC with another 16 months to clear it before interest and I own a car on finance which costs me £225 a month. Other than that, I'm managing to save between £800 - £1000 a month. If it helps I'm also on the electoral role.

    I'm about to fill out an appeal letter to which I will send off to halifax however I was wondering if anyone had a rough idea as to why I would of been rejected?
    Saving for a house deposit
Page 1
    • zx81
    • By zx81 14th Mar 17, 11:27 AM
    • 13,618 Posts
    • 14,071 Thanks
    zx81
    • #2
    • 14th Mar 17, 11:27 AM
    • #2
    • 14th Mar 17, 11:27 AM
    Credit isn't issued on the basis of credit scores. It's all based on lenders' criteria.


    Have you checked the data on all three of your files? And how much is the car?
    • PeacefulWaters
    • By PeacefulWaters 14th Mar 17, 12:17 PM
    • 6,968 Posts
    • 8,586 Thanks
    PeacefulWaters
    • #3
    • 14th Mar 17, 12:17 PM
    • #3
    • 14th Mar 17, 12:17 PM
    How recent was the car loan?

    How much is the car loan?

    What's your existing relationship with Halifax?

    Do you pay above minimum payments on your existing cards?
    • TheShape
    • By TheShape 14th Mar 17, 12:20 PM
    • 1,044 Posts
    • 801 Thanks
    TheShape
    • #4
    • 14th Mar 17, 12:20 PM
    • #4
    • 14th Mar 17, 12:20 PM
    As well as answering the questions above, who issued the other two cards, and what are the credit limits?
    • chris9393
    • By chris9393 14th Mar 17, 1:00 PM
    • 46 Posts
    • 69 Thanks
    chris9393
    • #5
    • 14th Mar 17, 1:00 PM
    • #5
    • 14th Mar 17, 1:00 PM
    Credit isn't issued on the basis of credit scores. It's all based on lenders' criteria.


    Have you checked the data on all three of your files? And how much is the car?
    Originally posted by zx81
    I understand that it's not based solely on the credit score. I haven't properly ready through my files as such yet but will check later on this evening when I have more time.

    The total cost of my car is £22,900 to which I am paying off £225 a month for 36 months. When the 36 months is up I will look at buying the car out right.

    How recent was the car loan?

    How much is the car loan?

    What's your existing relationship with Halifax?

    Do you pay above minimum payments on your existing cards?
    Originally posted by PeacefulWaters
    I used to own a current account with Halifax however I switched over to First Direct. I do however have an Help to Buy ISA which I pay into monthly and have a credit card with halifax which has been fully paid off and I haven't used it in about a year. Before applying for the new credit card, I tried to close my old card with halifax however they advised me to apply online first and close it once the application was successful.

    As well as answering the questions above, who issued the other two cards, and what are the credit limits?
    Originally posted by TheShape
    One card with Halifax which has been fully paid off and another with The Post Office. At the moment, due to the long 0% APR with on the post office account, I am currently paying the minimum however some months I do pay above.
    Saving for a house deposit
    • TheShape
    • By TheShape 14th Mar 17, 1:06 PM
    • 1,044 Posts
    • 801 Thanks
    TheShape
    • #6
    • 14th Mar 17, 1:06 PM
    • #6
    • 14th Mar 17, 1:06 PM
    And the credit limits?
    • PeacefulWaters
    • By PeacefulWaters 14th Mar 17, 1:06 PM
    • 6,968 Posts
    • 8,586 Thanks
    PeacefulWaters
    • #7
    • 14th Mar 17, 1:06 PM
    • #7
    • 14th Mar 17, 1:06 PM
    Your unsecured debt is huge compared to your salary.

    I'd suggest that's the reason why you've been declined.
    • chris9393
    • By chris9393 14th Mar 17, 1:14 PM
    • 46 Posts
    • 69 Thanks
    chris9393
    • #8
    • 14th Mar 17, 1:14 PM
    • #8
    • 14th Mar 17, 1:14 PM
    And the credit limits?
    Originally posted by TheShape
    £2000 on the Halifax
    £3000 on the Post Office

    Your unsecured debt is huge compared to your salary.

    I'd suggest that's the reason why you've been declined.
    Originally posted by PeacefulWaters
    I wouldn't of thought that would of been an issue considering I can comfortably afford to pay off the monthly instalments of the car. Once the 36 months is up I can then either walk away, buy the car or trade it in for a new on. Buying the car outright is the option I am swinging towards at the moment.
    Saving for a house deposit
    • PeacefulWaters
    • By PeacefulWaters 14th Mar 17, 1:34 PM
    • 6,968 Posts
    • 8,586 Thanks
    PeacefulWaters
    • #9
    • 14th Mar 17, 1:34 PM
    • #9
    • 14th Mar 17, 1:34 PM
    Your unsecured debt is pretty close to your annual take home pay.

    It's not the monthly payment that worries them it's the size of the balance outstanding.

    I assume you have a plan to significantly reduce the debt in the face of a rapidly depreciating asset ...
    • eskbanker
    • By eskbanker 14th Mar 17, 1:52 PM
    • 5,558 Posts
    • 5,402 Thanks
    eskbanker
    Your unsecured debt is pretty close to your annual take home pay.

    It's not the monthly payment that worries them it's the size of the balance outstanding.

    I assume you have a plan to significantly reduce the debt in the face of a rapidly depreciating asset ...
    Originally posted by PeacefulWaters
    The way I read OP's clarification is that they don't actually own the car as stated in earlier posts but lease it, so the total £22.9K value of the car itself shouldn't be seen as a debt, 'just' the 36 month £8.1k commitment....
    Once the 36 months is up I can then either walk away, buy the car or trade it in for a new on.
    Originally posted by chris9393
    • JimmyTheWig
    • By JimmyTheWig 14th Mar 17, 1:55 PM
    • 11,510 Posts
    • 11,164 Thanks
    JimmyTheWig
    The way I read OP's clarification is that they don't actually own the car as stated in earlier posts but lease it, so the total £22.9K value of the car itself shouldn't be seen as a debt, 'just' the 36 month £8.1k commitment....
    Originally posted by eskbanker
    But what do the credit files say?
    • Marchitiello
    • By Marchitiello 14th Mar 17, 9:24 PM
    • 261 Posts
    • 94 Thanks
    Marchitiello
    It sound like a HP agreement which is not unsecured (if you do not pay they get back the car).
    • Ben8282
    • By Ben8282 15th Mar 17, 2:14 AM
    • 2,030 Posts
    • 888 Thanks
    Ben8282
    A major contributing factor to this decline is almost certainly a high PCP balance.
    I don't know if you have actually checked your credit files or are just going by the score, but the balance being reported for the PCP is almost certainly the total outstanding (including the balloon payment) amount due under the PCP agreement. This may be a very large amount of money.
    Last edited by Ben8282; 15-03-2017 at 5:15 AM.
    • chris9393
    • By chris9393 15th Mar 17, 9:55 AM
    • 46 Posts
    • 69 Thanks
    chris9393
    A major contributing factor to this decline is almost certainly a high PCP balance.
    I don't know if you have actually checked your credit files or are just going by the score, but the balance being reported for the PCP is almost certainly the total outstanding (including the balloon payment) amount due under the PCP agreement. This may be a very large amount of money.
    Originally posted by Ben8282
    I'm currently 2 years into my 36 month contract for leasing my car. The end payment I believe is around £12,000, that is, if I wish to purchase the car which at this moment in time I am planning on doing.

    I've just checked my credit files and although I'm not entirely sure what to properly look for, everything checks out 'OK' and there are no red flags pinging around. The only 'debt' my credit files show that I am in is the £1600 on my current credit card.

    Is there something specific I should be looking for on my credit file?
    Saving for a house deposit
    • verityboo
    • By verityboo 15th Mar 17, 10:25 AM
    • 870 Posts
    • 1,079 Thanks
    verityboo
    So the file should show approx £15K outstanding on the car (including optional final payment to purchase) and you have £5K limit on your 2 current credit cards. They are not interested in the current balance on the cards, only the limits because you could go on a spending spree tomorrow and run them up to the max
    • Nasqueron
    • By Nasqueron 15th Mar 17, 10:52 AM
    • 4,179 Posts
    • 2,334 Thanks
    Nasqueron
    Close the Halifax card and give it a couple of months, possible they simply won't issue you with 2 credit cards

    Why do you need another card anyway? If you have £800+ a month spare then you will have no issue paying down the £1500 on the other card in the 16 months and you have a spare card for purchases.

    Also, ignore the people blathering on about depreciating assets, if you are keeping the car and can afford the payments it's utterly irrelevant, it's only an issue if you want to sell it at the end
    • chris9393
    • By chris9393 15th Mar 17, 12:14 PM
    • 46 Posts
    • 69 Thanks
    chris9393
    Close the Halifax card and give it a couple of months, possible they simply won't issue you with 2 credit cards

    Why do you need another card anyway? If you have £800+ a month spare then you will have no issue paying down the £1500 on the other card in the 16 months and you have a spare card for purchases.

    Also, ignore the people blathering on about depreciating assets, if you are keeping the car and can afford the payments it's utterly irrelevant, it's only an issue if you want to sell it at the end
    Originally posted by Nasqueron
    I will go ahead and close the Halifax account. I did try to do this but they insisted to me that my best option was to keep it open until I open up a new credit card. Now they're saying my best option is to write to them as to why I believe I should of been accepted and wait for an outcome before closing the account.

    Regarding the car, the reason I will be purchasing it for the £12,000 is because the car will be worth more that than to sell on privately. I'd rather make a few quid than hand the car back and walk away empty handed.
    Saving for a house deposit
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