CARD REFUSAL :Excellent credit score, a thought

BLACKHURSTM

I was just browsing through the Credit Card threads, looking at the comments about card refusal to people with high income and good credit scores.
I wonder wether some card are only targetting medium/low credit rated people, hoping they cannot keep up payments and continue long term paying the high interest.

With the days of stoozing, people on higher incomes generally won't pay interest, and therefore not the best profit generators for the card companies,only the profit they make from the retailer.

I myself have top credit rating but middle income,and have not been refused any cards so far
I have stoozed, sainsbury 4k, egg 6k, m&s 5.5k , hsbc 10k ,tsb 8k, virgin 5k and citi 7k. also my wife doing the same with similar credit limits.
Normally 3 on the go in various stages,cancelling all as I finish paying them off.

The_Boss

Refusal could be down to too much used/available credit, too many searches and other factors. I'm in a similar boat to you - never missed a payment and many accounts showing up to 6 years of perfect history. Yet I've been rejected for 3 in a row over the past 6 months.

The Experian/Equifax credit scores are a total joke by the way, so dont pay attention to those.

Astaroth

no one can say they have a good credit score as every single lender has their own scoring system and so no one has a constantly good credit score across all lenders as some view opposing responses to be good.

As with all companies, no one targets the whole of the country equally as it is simply not possible to create a product/ brand image/ adverts etc that will appeal to everyone equally. So yes, as you suggest they will target a particular market section, be that geographical, age, socio-economic in nature. This will be done through a mixture of branding, advertisements and product features this will affect the common pool (to use an insurance term) of their customers and their underwritting criteria will have to be such as to make a profit from the mix of customers they have.

Paul_Herring

Having recently cancelled £28k of available credit, I was refused a nationwide card (I suspect because the cancellations haven't yet been posted to the CRAs yet) - I shall be appealing.

The_Boss

Paul_Herring wrote:

Having recently cancelled £28k of available credit, I was refused a nationwide card (I suspect because the cancellations haven't yet been posted to the CRAs yet) - I shall be appealing.

Do a search for my "Closing credit cards : an opposite view" thread - sounds identical to my situation.

Paul_Herring

The_Boss wrote:

Do a search for my "Closing credit cards : an opposite view" thread - sounds identical to my situation.

(Thread mentioned: http://forums.moneysavingexpert.com/showthread.html?t=175234)

No - it's not identical - the cancellations are probably not on my CRA reports. As far as Nationwide are concerned, I still have £28k oif debt, where the reality is I've paid it off and no longer have those lines of credit available.

Moggles_2

I was just browsing through the Credit Card threads, looking at the comments about card refusal to people with high income and good credit scores.

Bear in mind, this rests on self-assessment. Opinion as to what amounts to a high income varies appreciably between individuals. Fortunately, lenders score us differently as well!

I wonder wether some cards are only targetting medium/low credit rated people, hoping they cannot keep up payments and continue long term paying the high interest.

Some cards, such as Vanquis, are specifically aimed at high-risk borrowers but, more often than not, the bad payers select themselves. Credit card companies set out to lure new customers with 0% introductory offers, knowing that when the promotion ends, some will be unable to pay up in full or shift the balance elsewhere to avoid the much higher standard interest rate.

people on higher incomes generally won't pay interest

Presumably, you don't pay interest, though you describe yourself as having a 'middle' income.

only the profit they make from the retailer

Once upon a time, all credit card companies made a good living this way. If customers now use their cards for balance transfers and credit card cheques rather than purchases, the card providers have only themselves to blame.

The_Boss

Paul_Herring wrote:

(Thread mentioned: http://forums.moneysavingexpert.com/showthread.html?t=175234)

No - it's not identical - the cancellations are probably not on my CRA reports. As far as Nationwide are concerned, I still have £28k oif debt, where the reality is I've paid it off and no longer have those lines of credit available.

Fair enough, there's always that too which makes more sense. I know I bang on about that thread a fair bit but I'm hoping other people can learn from my lesson where applicable.

LollyLou_2

Having become a member of this site almost 6 months ago (how I wish it was 6 years ago, I would have saved even more money!!) I have kept a very keen eye on my credit file, recognising that this is vital with regards to applying for credit etc. Unfortunately, due to a period of unemployment a couple of years ago, I defaulted on a loan with Alliance & Leicester. The outstanding balance at the time was almost £8K (ouch!) however, as soon as I got a new job I continued to make the montly payments and now have only £1K left to pay.

I was very worried that the default registered was going to prevent me from taking advantage of applying and being accepted for 0% Credit Card deals but I was delighted when applying for HSBC 0% deal this week, to be accepted straight away with a limit of £5K!!! I am planning to balance transfer this amount from my two existing CC's and get as much paid off over the next 12 months as I can.

I guess my question is that how people who have perfectly good credit reports i.e. no defaults or late payments are turned down for credit, yet me with a default gets accepted?!?! It really doesn't seem fair that you do your best to ensure that all your cc's, loans etc all get paid on time and yet this doesn't always do you any favours.

msmicawber

I wonder if it could be that some of the people who are refused, apparently for no reason, have had no credit activity at all on their files, so are viewed as unknown risks?

The_Boss

LollyLou wrote:

Having become a member of this site almost 6 months ago (how I wish it was 6 years ago, I would have saved even more money!!) I have kept a very keen eye on my credit file, recognising that this is vital with regards to applying for credit etc. Unfortunately, due to a period of unemployment a couple of years ago, I defaulted on a loan with Alliance & Leicester. The outstanding balance at the time was almost £8K (ouch!) however, as soon as I got a new job I continued to make the montly payments and now have only £1K left to pay.

I was very worried that the default registered was going to prevent me from taking advantage of applying and being accepted for 0% Credit Card deals but I was delighted when applying for HSBC 0% deal this week, to be accepted straight away with a limit of £5K!!! I am planning to balance transfer this amount from my two existing CC's and get as much paid off over the next 12 months as I can.

I guess my question is that how people who have perfectly good credit reports i.e. no defaults or late payments are turned down for credit, yet me with a default gets accepted?!?! It really doesn't seem fair that you do your best to ensure that all your cc's, loans etc all get paid on time and yet this doesn't always do you any favours.

I guess that you can show that you were organised and responsible enough to pay off £7k of that after your default, so its a good indication that you have changed your ways. Thats probably why HSBC were happy to take the chance.

In my opinion, having a loan showing on a credit report is also a damn good indicator of repayment history, as it shows you are paying off a set amount each month, whereas with credit cards you could be paying off the bare minimum