Credit Rating: How it works and How to improve it discussion area

never-in-doubt

Julash wrote: »

Hi all,

I'm looking to get my first credit card. I don't have a mobile phone contract. I do have a graduate account with an overdraft, I'm currently about £800 into my overdraft. Would it be sensible to pay off this overdraft before applying? I applied for a credit card at my bank in early December but was rejected. I am on the electoral register too. I was hoping to apply for a first time credit card, for example with vanquis.

Thanks in advance
Ash

Read this and on page 1 the sub prime cards are listed: The Sub Prime Credit Thread - Part IV

To appeal the decline from december with your bank, use this template: BEEN DECLINED - Appeal Letter Template

Julash

Zack1 wrote: »

That's odd your own bank have rejected you if you have a graduate account with them, as you've been with them for years then (from having a student account?). Definitely pay the overdraft off though, and wait a month or 2 for the CRAs to see it’s been paid off. Do you have any information on why your bank rejected you? That could help you to appeal and try to get it overturned

It won't come through with the credit agencies immediately? Hmmm, that's a pain because I need it pretty soon!

I didn't get any info about why they rejected me, but I'm on a low income. The guy said that if I'd had a credit card with them whilst I was a student (they just give them away for free, ironically), it would've been no problem! But because I'm careful with my money I didn't need one... banks are illogical!

Thanks for the links

Zack1

Julash wrote: »

It won't come through with the credit agencies immediately? Hmmm, that's a pain because I need it pretty soon!

I didn't get any info about why they rejected me, but I'm on a low income. The guy said that if I'd had a credit card with them whilst I was a student (they just give them away for free, ironically), it would've been no problem! But because I'm careful with my money I didn't need one... banks are illogical!

Thanks for the links

Nope, it comes up in the monthly update, so if you've just missed an update then it's at least a month (they update throughout the month but without looking on your report you won't know when your date is)

Yea can understand it, it's because having one while you are a student makes a credit history for yourself - so they are able to see you had a limit of X, never went over it, always paid in full etc etc. I'm really careful with money and have 2 cards, a catalogue account and a pending card appeal, all so that I have decent history and can eventually get a decent card.

Based on that I'd say an appeal is unlikely to work unless you have savings you can mention, but it's worth a try anyway. When you are a student they relax the criteria (a bit, Natwest clearly don't!) and they give benefit of the doubt because of your age - most have no credit history at 18 - but when you aren't a student you are left trying to get a mainstream product (hard without good history let alone no history) and no benefit of the doubt due to your age or student status

lisyloo

But because I'm careful with my money I didn't need one... banks are illogical!

No it's not illogical.
Having a history of managing credit, making payments on time, not being late, not going over limits etc. is important to banks.
Having no history means you are an unknown quantity.
You might not have needed it and be very good with money but you don't have the proof of that.
Having a credit card, even if you do nothing with it at least proves you weren't late and didn't get into trouble with it, even if you did absolutely nothing.

peakoilisnow

Up till the financial crash of a year ago I'd never had problems applying for credit cards (mainly for the balance tarting). I've got about 4K of debts, which are gradually going down.

I have five active credit cards with the debts or some regular payments, eg ISP and webhosting. I don't balance transfer to purchasing cards.

I've started getting turned down. My self-employed income has reduced because of the crash and so its a bit harder, though I can still meet the payments, so it obviously makes sense to shift the balances to another zero % deal, but I get turned down every time. I've had about four late payments (2 bank Direct debits)over the last year, one is a dispute with a bank, and one was simply that my reminder software (24h lucky reminder FYI) crashed and I forgot to make one.

Barclaycard and MBNA have both slashed my credit limit and MBNA didn't give me another card when it reached its expiry date.

I got my Experian credit report and realised that for some reason it hadn't recorded I was on the electoral register. Got that fixed.

So is it the dispute with the bank that's (£285 charges for a £5 dispute) that's causing this?

I have made 200 or 300 payments on time over the last five years and have been at the same place for 15 years so. Any advice and help welcomed.

Chrysalis

bingy_burge wrote: »

Do you have cap1 classic card?

I believe I do but there is some question marks over if my account has been silently upgraded or not, but I most defenitly started on the classic card.

However my current credit limit is now higher than the upper limit of the classic card.

Zack1

Chrysalis wrote: »

I believe I do but there is some question marks over if my account has been silently upgraded or not, but I most defenitly started on the classic card.

However my current credit limit is now higher than the upper limit of the classic card.

They upgrade you!? :eek:

How long have you been with them to get an upgrade?

Chrysalis

almost 2 years, if I remember right I got accepted for the card in jan 2008

Zack1

Chrysalis wrote: »

almost 2 years, if I remember right I got accepted for the card in jan 2008

Thanks, it's possible then . I heard if you are stuck on their classic card then you get 1 increase and that's it, so hopefully they upgrade me.... Did you ever have a balance with them? I'm worried if I make them no money I won't exactly be top of the list for an upgrade...

Chrysalis

I have a balance, no where near my limit but a balance is there.

Initially for the first 2 increases it was just paying in full every single month, after that I kept a small balance but pay way more than the min payment, typically I am spending money on the card hence the payments.

Even if they make no interest of you, if you regurly use the card they make cash on transaction fees.

My current balance is about £650, £400 of it was christmas spending and I am this week making a payment of about £500 to the card to bring it back down again.

I suspect those who only service the interest (min payments) are killing their chances of an upgrade.