What happened to my Credit Rating?

plisko

Hi

I was reading some money saving tips on this website a few weeks ago and thought I'd try two things that seemed simple - one was sign up for the Tesco Credit card and the other was to sign up for the First Direct current account. They both seemed like they'd offer some worthwhile rewards.

However, I was declined for both (declined instantly for the credit card, received confirmation that my current account application was declined about a week later)

This surprised me as I've never been declined anything in the past and I've always paid everything on time and assumed I've always had a good credit rating. I was perplexed but it wasn't that big a deal, I didn't *really* need them anyway.

But that was a few weeks ago. Then today I received a letter from Lloyds TSB, who I bank with. They said that due to a recent review of my credit rating, they were halving my credit card limit from £2000 to £1000.

Needless to say this has worried me a lot. Both because I use that credit limit, and because of the wider implication that something is up.

In the letter from Lloyds TSB they said to contact Experian, so that's what I've done. Set up an online account to check my details. And I just don't see anything wrong. No missed payments ever, no outstanding debts, no problems whatsoever. I even decided to pay the small fee to see my credit score, and I scored 899 which is supposedly a good score. The one and only thing they said I could improve is that I'm not on the electoral register (I'm Irish and have lived in the UK 3 years, not even sure if I qualify to vote here)

So... what's wrong? Why am I being refused credit? I went through Experian's credit card application feature, which automatically tells you what credit cards you can apply for based on the information they have on you, and it rules out absolutely everything except the really poor value credit-building cards. So they obviously have something on me that's not good, but I'll be damned if I can see what it is.

Any suggestions would very much be appreciated!

ziknik

Have you got a lot of available credit. i.e. some big overdrafts that you might use and some credit cards sat in a drawer?

plisko

:money:

ziknik wrote: »

Have you got a lot of available credit. i.e. some big overdrafts that you might use and some credit cards sat in a drawer?

Nope. £400 overdraft and my Lloyds TSB credit card.

I do have an Irish credit card which doesn't appear on my credit report and I pretty much never use, so I don't know if that's relevant at all.

YorkshireBoy

plisko wrote: »

This surprised me as I've never been declined anything in the past...

In the UK?

What credit based accounts are showing on your Experian report?

thriftymomma

Being on the electoral roll will definitely improve your chances in my opinion.
And is your credit card your only credit account? Could a limited history rather than an adverse history be to blame?

plisko

YorkshireBoy wrote: »

In the UK?

What credit based accounts are showing on your Experian report?

I've never been declined anything at all - but then I've never actually applied for anything beyond the single current account + credit card I had in Ireland, then the single current account + credit card that I've had in the UK, never had any loans or anything.

The accounts on experian show my current account, my credit card, and T-Mobile, all of which have a balance of £0 - this isn't actually correct because I currently owe around £100 on my credit card (which will be repayed on time) - all of them have a full history of no missed repayments whatsoever.

I did change job and address in March - I updated my address with the bank at the time, and my current salary is higher than it was previously, so I don't see how that could have any negative effect. There was a burglary in March too - I had to cancel all my cards and get them replaced, but none of them had been used so no major issue there either. I'm struggling to see what the problem could be.

By the way, if T-Mobile are listed, should my other utility companies be listed too? I'm currently also paying direct debits to a bunch of other companies like BT etc.

plisko

thriftymomma wrote: »

Being on the electoral roll will definitely improve your chances in my opinion.
And is your credit card your only credit account? Could a limited history rather than an adverse history be to blame?

Possibly - but I don't understand what has specifically changed. They approved the £2000 limit when I requested it around a year ago (although I'm aware banks have become tighter since then), there's never been a problem since, so why would they specifically reduce it now?

Is there an actual person who made this decision that I can speak to? Lloyds just direct me to Experian, who give me a full report that looks fairly healthy. It would be nice to speak to someone directly about what specifically caused the change.

YorkshireBoy

plisko wrote: »

I'm struggling to see what the problem could be.

You're not a UK National
You're not on the Electoral Roll
You haven't got 6 years worth of residency/traceability/Electoral Roll history on your credit report
You've recently changed jobs
You've recently changed address
You don't have 6 years credit report 'history' in the UK

In summary, you are a poor credit risk (in the eyes of lenders) and so have failed on their scoring systems (FD are known to be particularly picky).

By the way, if T-Mobile are listed, should my other utility companies be listed too?

T-Mobile is a credit based service. None of my utilities are shown on my credit report.

I'm currently also paying direct debits to a bunch of other companies like BT etc.

Irrelevant, as regards your current issue.

YorkshireBoy

plisko wrote: »

Possibly - but I don't understand what has specifically changed.

I had an old LTSB card with a £16K limit. They recently wrote to me to inform me they were cutting it to £1K. I closed the account!

My current account providers (not LTSB) have cut the (unused) overdraft facilities on both my current accounts from a combined £8K to less than £1K.

It's a sign of the times I'm afraid.

Is there an actual person who made this decision that I can speak to?

The computer has made the decision, but you should be able to appeal in writing to have your case heard by an underwriter. If you got the same letter I did it invited you to do so, including a copy of your Experian credit report.

Moggles_2

For more tips to improve your chances of credit card acceptance, have a look at the *Credit Rating: how it works and how to improve it guide* especially Martin's *Manage and Improve your credit score* article

http://www.moneysavingexpert.com/banking/credit-rating-credit-score#improve

plisko

Ok thanks for the info.

If it's just a lack of history then that's a relief. I can live with the 1k limit if I have to, I was just really worried that something had happened to my credit rating.

I've looked up details on the electoral register and Irish nationals are eligible, so I'll get on with doing that.