Re: Declined but excellent credit? Unsure Thread

sjane2008

Hi there,

I have an excellent credit rating according to experian/equifax online (callcredit) and capital one have just increased my limit.

However when I applied for a new credit card with my bank, Halifax they declined straight away reffering me to my report. I've since complained asking for a reason as the report is fine. I've had no respone from customer relations, any help or advice would be greatfull!! Wanted halifax card as wished to stay with bank, dont ask just prefer all same company (old fashioned!)


xxx

fermi

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pigeonpie

take in the report or fax it to them and ask for a reason why they found you an unacceptable risk, based on that report.
My OH has had a recent Barclaycard refusal which he thinks was malicious; he applied, was told ok, then a troll rang while he was in a client meeting so he (probably quite brusquely) told them he couldn't talk now, so Ms B'card hung up on him in a huff....2 days later he got the refusal letter!
as they are your bank, fight them - threaten to move bank. Good luck.

The_Frenchman_2

An excellent credit rating is not always what a bank is looking for. If you are the type of person who clears their bill each month then you pay no intrest, late fees or any other type of charge.

In short this means the bank has to administer your credit card while making no money from you. It could be that you are a victim of your own good habits and that is why you were turned down!

Cheers

GrammarGirl

This is probably the most obvious answer and most likely won't apply to you - but have you ensured you're registered on the electoral roll for your current address, and that this information is on your credit report? I was declined twice (ouch) before I realised this was the reason.

RichyRich

Credit is becoming more difficult to come by, and the banks need to make sure that their criteria is being applied rigidly (or apply more stringent criteria) so that they can be more certain that A) the monies will be repaid and a greater proportion of monies lent yield an acceptable return.

My credit rating is similarly very good and yet I have recently had an application declined for a Bank of Ireland Credit Card, however, I believe this to be a function of B rather than A, on the basis that I don't pay anyone any interest!!!

sjane2008

it's depressing itsn't it! I've spent years building up credit as before had none, and yes i do normally pay in full and now i still get declined. Plus this means i have to leave it 3 mths now i guess! thanks guys, lets just hope credit crunch, maybe they should look at changing how they rate credit and that would help companies/banks!

Inactive

The_Frenchman wrote: »

In short this means the bank has to administer your credit card while making no money from you.
Cheers

The bank is still making money, they get a percentage from each transaction.

RichyRich

Inactive wrote: »

The bank is still making money, they get a percentage from each transaction.

That's got to be a secondary source of income after interest though; I'm not au fait with the figures, but for arguments sake let's say a business pays 5% of the transaction value when paid by credit card. That commission needs to effectively be divided up three ways - the acquiring bank, VISA/MC/AmEx, and the paying bank. In some cases, the paying bank split their allocation of the commission with the cardholder.

I'd suggest that the lion's share of the commission would be paid to the facilitating organisation, i.e. VISA/MasterCard/AmEx. So for the sake of argument let's assume they get 3% of the transaction value, which leaves 2% to be divided between the paying bank and the acquiring bank. Exact splits will, of course, vary as they will be individually negotiated, but even if we work on the assumption that they split it down the middle, the paying bank gets 1% of the transaction value.

This means that the cardholder needs to buy £30 worth of goods each month before the bank can even afford to send him or her a statement - probably more like £45 once you take into account the cost of paper, printing, and administration involved.

Compare this to interest rates of up to 49.9% APR and it's obvious where the credit card company's main income stream is!

RobertoMoir

Inactive wrote: »

The bank is still making money, they get a percentage from each transaction.

They probably regard that money as the cost of administering the card and the interest they 'expect' to earn as the profit.

Inactive

Well I always pay my Credit Cards off in full each month, it doesn't stop me getting regularly bombarded with new offers from other CC companies through the post.;)