Help Needed On Why Im Denied Credit!

aaran7

Hi all, I have just applied for the tesco clubcard and got denied and then tried the sainsburys and also got denied. I am wondering why as I currently have a halifax all in one card and a natwest platinum both interesest free periods on these cards have finished now so i have paid off halifax, and have just cleared the natwest this week. As I bank with Natwest, I get a good credit limit £3,800, and halifax Ive not been with so long so they only allowed me £800. Tesco and sainsburys have both denied my application and im wondering why?

other factors i think it may include are, im 21? my annual income is £6000 roughly. and i have also just become a student in september, so i work and study? I need a card with 0% on purchases as my car insurance is due nxt month lol! i was thinking about checking my credit rating but the more searches i do will decrease it apparently.

any advice or ideas anybody?
Thanks in advance

Tixy

Do you have a good credit history? are you on the electoral roll? how much total credit do you have available and how much are your current debts?

I would expect the reason you cannot get further credit is because you already have at least £4600 (plus any other credit/overdrafts etc) credit available and only have a £6k income, therefore they assume you won't be able to service any additional debt. The 0% deals are pretty hard to get these days.

Applying for your credit report will not affect it, it does not count as a credit search.

izools

aaran7 wrote: »

other factors i think it may include are, im 21? my annual income is £6000 roughly.

Total available credit of £4,600 atop whatever overdrafts you may have is a lot for someone on a £6,000 salary / wage.

Hold off the applications for now or you'll damage your credit score further.

Once you've got your student loan and know how much it is, you can enter the annual student loan allocation and your wage as your gross annual income. It's better to state your occupation as "Part Time Employed" rather than "Full Time Student", too. Neither would be lying but students score lower than part time workers.

You should be OK once you can bump up that income figure with your Student Loan, and you might also benefit from reducing the credit limit on your Natwest card, so that you don't have "Exposure" to too much credit if you want another creditor to extend you more.

As a general rule, 50% of your income as debt is the absolute limit for most creditors to trust you. So most lenders would be comfortable with you having access to around £3,000 credit in total given your income

MsAnderson

This is somewhat similar to my problem, low income. I was interested in what you say about the available credit ratio to income, izools.

As a general rule, 50% of your income as debt is the absolute limit for most creditors to trust you.

Would that 50% comprise the debt you actually had, or the credit available to you? If it was debt already accrued, would that include a mortgage (maybe not applic in OPs case).

ynwa6

The same thing happened to my wife, she has a natwest credit card and applied to for the tesco clubcard credit card, but was rejected. I looked into it and it seems the tesco card is run by natwest and generally if you already have a credit card with one institution/bank you automatically are refused a second.

ynwa6

Actually its RBS who issue the tesco credit card who also issue the natwest credit card. And for completion sake HBOS (or the group formally known as HBOS) issue the sainsburys card, which may explain both rejections. There is a previous discussion about this and they provide a link to stoozingdotcomforwardslashcards for more information.

izools

MsAnderson wrote: »

This is somewhat similar to my problem, low income. I was interested in what you say about the available credit ratio to income, izools.

As a general rule, 50% of your income as debt is the absolute limit for most creditors to trust you.

Would that 50% comprise the debt you actually had, or the credit available to you? If it was debt already accrued, would that include a mortgage (maybe not applic in OPs case).

Like I said in your thread - this would be lines of credit like store cards, credit cards, loans. Mortgages aren't taken into account.

So if you have a £10,000 annual income, it's unlikely any lender would want you to have exposure to more than £5,000 credit available across all accounts.

So if you have a £10,000 income and two cards already, one with a £2,500 limit and one with a £3,500 limit, it's highly unlikely anyone will further you another line of credit even if you only owe £5 on each card.

To improve your chances of being accepted it may be wise to reduce the credit limits on your existing cards so that there is some room between the 50% figure and your existing available credit. Then another lender may be happy to "fill the gap" so to speak

jw2003

That's very good information Izools, something that's not occurred to me (stupidly). I have £3k on a Marbles card but am not working at present and they have hiked the interest rates up massively. I have got a new job though so hopefully later in the year I might be able to transfer the balance elsewhere and clear the debt quicker. At present I pay the interest + £125 per month and I have a small loan which ends in October so by then it would be a much more viable option (fingers crossed)

Any

hans1983 wrote: »

Actually its RBS who issue the tesco credit card who also issue the natwest credit card. And for completion sake HBOS (or the group formally known as HBOS) issue the sainsburys card, which may explain both rejections. There is a previous discussion about this and they provide a link to stoozingdotcomforwardslashcards for more information.

I have both NatWest and Tesco card... So that rules our unability of getting both.

jw2003

Any wrote: »

I have both NatWest and Tesco card... So that rules our unability of getting both.

Recently? I do know that with MBNA they clearly state if you have one of their cards you will not get another, both of my cards are MBNA now but weren't always so

Scaredy_Cat_3

jw2003 wrote: »

Recently? I do know that with MBNA they clearly state if you have one of their cards you will not get another, both of my cards are MBNA now but weren't always so

I have an MBNA affinity card, which I've had for years. At Christmas I applied for an Amazon card - got accepted, and that also turned out to be an MBNA card.