Credit Card Rejection but I have an Excellent Credit Rating - Why?

creditscorehelp

I have checked my credit score on Experian and my score is 507, which is excellent.

Why then when I apply for a credit card am I told I am rejected because my credit score is bad?

I have paid back all money I have ever borrowed, I have a small overdraft I am in. I don't understand why I am being rejected, it is very upseting.

I have applied unsuccessfully for Natwest, Virgin and Egg.

thanks

bingy_burge

There are manay reasons do you have any existing cards and if so with who and how long have you been paying the off each month?

Natwest are tight I find and some lenders have other criteria and a good credit rating.

When I went on experian they send that 507 is poor the said I was 600 which is till poor 1000 is good/excellent but many say the experians score means nothing.

Do you have income over 15k or 21k

Are you over 21 over 25?

Are you homeowner?

They are some of the criteria you will find that those lenders will want to see b4 you get a prime credit card. Plus you need to have 2 years plus history these days.

If you have applied for those 3 cards in the 6 months then hold fire on any more as to many searches liek more than 2 will often put off even the sub prime lenders.

Have you tried capital one classic?

lisyloo

Experian credit score mean little.
The lenders will do their own score.

People with excellent records do get recjected.
Lenders want to make more money (interest) out of those who aren't so good at managing their money.
So perhaps you are very prudent but not very profitable for them.

BASFORDLAD

creditscorehelp wrote: »

I have checked my credit score on Experian and my score is 507, which is excellent.

Why then when I apply for a credit card am I told I am rejected because my credit score is bad?

I have paid back all money I have ever borrowed, I have a small overdraft I am in. I don't understand why I am being rejected, it is very upseting.

I have applied unsuccessfully for Natwest, Virgin and Egg.

thanks

Yet another person fooled by "credit scores" from CRA's. Save your money!

izools

creditscorehelp wrote: »

I have checked my credit score on Experian and my score is 507, which is excellent.

Why then when I apply for a credit card am I told I am rejected because my credit score is bad?

I have paid back all money I have ever borrowed, I have a small overdraft I am in. I don't understand why I am being rejected, it is very upseting.

I have applied unsuccessfully for Natwest, Virgin and Egg.

thanks

For starters an Experian score of 507 is "Very Poor" as far as Experian are concerned. Are you sure you don't mean Equifax?

Anyway, the credit scores that the CRAs give you can be misleading.

A potential creditor will look at lots of factors, including:

> How long you have lived at your current address
> How long you have been on the electoral role
> How long have you been in your current job
> How much you owe in relation to your income
> How old is your newest account (Under 12 months is not so good)
> How old is your oldest account (under three years is not so good)
> When did you last miss a payment? (Under a year ago is bad)
> How many active accounts are there on your credit file (around 5 is OK)
> How old is your most recent default? (under three years is bad)

The list goes on and on and on, to be approved for a high street card you typically need to:

> Be in your job for three years or so
> Be at your current address for three years or so
> Be on the electoral role
> Not have applied for credit more than twice in the last six months
> Not missed any payments on credit in the last 12 months
> Not been in serious arrears for atleast three years
> Not have any outstanding defaults
> Not have any settled defaults under three years old
> Not have any Court Judgments of any kind
- Some creditors don't mind satisfied CCJs over four to five years old
> Have a few (three to six ish) active accounts on your credit file
> Not have opened an account under a year ago
> Have a long history (three years or so) of credit agreements on your file
> Owe under about a third of your annual income over all outstanding credit agreements
> Not have too much unused credit (old unused accounts left open with big credit limits is considered a risk by some lenders)

Keep in mind of course that different critera mean more or less to different creditors, and may be more or less important in their decision making depending on who you go to and what their score sheet is like.

It's serious stuff and with the economy in the current state, if you don't tick all the boxes chances are you'll be turned away or given an astronomical APR, so don't feel ashamed - your not alone!

Have you considered Vanquis / Capital One / Barclaycard Initial?

It may come in handy to have a high APR credit card open, pay off the balance in full every month, and in a year or so your rating should have improved a fair bit, normally enough to be considered for a high street card or loan

If there's anything else you need to know, ask away!

missk_ensington

Hey I can share your frustration, my credit score is 732 with Experian and I have been refused credit by everyone. Im a homeowner, on electoral roll, never been so much as a day late with a credit payment in my life, have had 15+ credit cards since I was 18 that have all be used responsibly and terminated after a time. All I can think is that I took out an £8,000 person loan for my business back in April and they deem me to already have too much credit. This is a pain in the backside for me because I have a lot of 0% deals coming to an end that I wanted to balance tranfer but cant get the credit to do it! :-(

izools

missk_ensington wrote: »

Hey I can share your frustration, my credit score is 732 with Experian and I have been refused credit by everyone. Im a homeowner, on electoral roll, never been so much as a day late with a credit payment in my life, have had 15+ credit cards since I was 18 that have all be used responsibly and terminated after a time. All I can think is that I took out an £8,000 person loan for my business back in April and they deem me to already have too much credit. This is a pain in the backside for me because I have a lot of 0% deals coming to an end that I wanted to balance tranfer but cant get the credit to do it! :-(

How many times have you applied for credit in the last six months?

If you keep trying to chase the best deal with lots of applications you'll get into a spiral of refusal.

Once you've gone six months without applying, and you've had your loan account open for long enough to show you can handle the responsibility (i.e. atleast 9 to 12 months), you should be OK getting a 0% deal as long as the rest of your credit file and application is in order

TIP:- A multitude of recent credit searches can be more harmful to your score than even arrears or defaults in some cases!!

TIP2:- credit scores that you buy online are inaccurate because a) they don't know things like your income, marital status, residential status, length of time at address / job / bank etc, and b) every creditor weights certain aspects of your credit file differently, the credit reference agencies aren't privy to this information.

missk_ensington

Izools, thanks that post was really helpful. I hadn't applied for any credit since my loan back in February (just checked exact date) but then about a month ago I applied for two cards - Barclaycard and Nationwide and they both rejected my application. I did them both within 5 minutes of each other in the hopes that the first one that was rejected might not have had time to affect the second one - not sure though if that logic held any water though!

Ive been at my address for 2 years, and was a homeowner at my previous house too and have been with my bank my whole life. All I can think is that ebing 23 and having an £8,000 loan and there is also £6,000 on a Capital One credit card, that they are getting worried that Im accumulating too much credit because Capital One recently reduced my limit to within £50 of my balance, down from £10,000, even though Id always paid the debt each month, sometimes the minimum payment, other times £2-3,000 in a lump sum, so no idea why they got techy and cut the limit? Maybe they think my level of debt is becoming top great?? Im not sure

izools

I think its your levels of debt.

As a guideline, high street lenders would like to see your total owing to be under abot a third of your annual income.

If you owe £14,000 then your income would need to be on a salary of atleast £40,000 or so to be considered for a high street deal.

Nationwide are VERY Strict in my experience and Barclaycard actually want your income to be TEN TIMES your indebtness to be approved for some of their cards.

It might be worth considering an RBS card like Tesco or Mint after six months, if no luck then MBNA, both these companies can be a little more lenient with people in more debt but with a good credit history. No garuntees though - just personal experience from my Mum -

She was approved for an RBS Mastercard with 13 months 0% last year with total credit card debt exceeding £10,000 with only a £20,000 income, so I suppose it's worth a punt when the searches are a bit older!

I think her MBNA Platinum Plus limit was £8,100 when they approved her back in 2001 - when she was on BENEFITS - although a lot has changed since then.

missk_ensington

Thanks, its daft because not all card applications ask for 'other household income', the majority of my income isnt from my salary, I have about £15,000 a year from other sources like tax credits and child support which Im not sure if they are taking into consideration even when I submit the information. I will definately give it 5-6 months and try Mint or Tesco - thanks very much for your help, much appreciated x

Moggles_2

Originally Posted by izools
Nationwide are VERY Strict in my experience and Barclaycard actually want your income to be TEN TIMES your indebtness to be approved for some of their cards.

I second that. Barclaycard is known to be particularly stringent with available credit.

I don't know whether it's any consolation, but B'card has figured quite prominently on the *Best Balance Transfer* sticky recently and rarely for the right reasons. This lender currently turns away 50% of its applicants. Of those accepted, roughly a third do not get the card they applied for because of its rate-for-risk policy. Credit limits tend to be lowish too.