Lloyds refuse credit card but will give a loan???

andyb_sv

Hi all,

My wife and I went into Lloyds today to sort a joint account and I asked about a credit card for my wife to build her credit score for when we apply for a mortgage. They had just done a credit search for the account and the woman said they wouldn't be able to give my wife a credit card (no reason given) but a loan would go through if we want one.

I'm a bit confused, she advised that we check my wifes credit report to see if theres anything on it. My wife has never had a credit card, loan etc and to both of our knowledge has never missed a payment on anything at all (not that shes ever borrowed apart from mobile phone contract) We moved house about 4 months ago, could this affect it?

Any ideas? We're in the process of signing up to check her credit report. We checked it about 6months or so ago and all was fine.

Cheers,

PNPSUKNET

its just a way they think they would makemost money, its lloyds

ironlady2022

Would a loan be less risky?

opinions4u

andyb_sv wrote: »

My wife and I went into Lloyds today to sort a joint account and I asked about a credit card for my wife to build her credit score for when we apply for a mortgage. They had just done a credit search for the account and the woman said they wouldn't be able to give my wife a credit card (no reason given) but a loan would go through if we want one.

This will be based on the way they underwrite different kinds of credit product.

I'm a bit confused

A loan is a fixed debt for a fixed term with a fixed payment. Their liability is controlled.

A credit card is a variable debt (up to an agreed limit) with a variable term, a variable rate and a fine opportunity for abuse if the holder is so inclined.

In other words, the bank perceive the risk of a loan to your wife as lower than the risk of a credit card.

We moved house about 4 months ago, could this affect it?

Somebody with a more stable address history will score higher.

Hax

I was also wondering: are they suggesting a joint loan or one solely in your wife's name?

paulmcerlean

Lloyds wont often give a credit card at account opening - in about 6 months time, having used the account properly, you will be able to apply through online banking with a higher chance of success, or over the next 24 months, a credit card offer could appear in your online banking which is a preapproval of sorts.

SimbaSimon

You mentioned you moved 4 months ago, have you registered on the electorial register at your new address? If not thats one of the key checks they do so its a good idea to check that.

paulmcerlean

SimbaK2K wrote: »

You mentioned you moved 4 months ago, have you registered on the electorial register at your new address? If not thats one of the key checks they do so its a good idea to check that.

Doesnt explain why they would offer a loan?

Also, having just moved, they will have needed to provide previous address details for the last 3 years, which is why the risk assessment has allowed a loan.

It is just down to how they score the products. They score a credit card higher because of the variable risk it presents. A fixed term, fixed payment loan provides them with a little more security, albeit not much as it is unsecured credit, but still, enough to set a score lower than a credit card.

KingElvis

It's a simple one, she has met the criteria for a loan but not for a credit card.

The bank will have minimum scores for both products. If she needs a card to rebuild, try one of the subprime lenders like Capital One or wait six months and try the bank again.

andyb_sv

Thanks for all of the replies,I didn't expect this many.

I may need to add a few more details to clear things up.My wife and I already have a joint account with Lloyds,we were changing another account from a sole acc to a joint one. We didn't apply for a credit card,we were just asking if my wife getting one would help build her credit score as she's never had any loans,cc's etc etc. The lady who was serving us clicked a button and said they wouldn'd be able to offer my wife a cc but she would be allowed a loan.

We are on the electoral role but I'm going to double check this and have started sorting to request her credit report to make sure all is ok on there.

Maybe as she's never had credit in the past could be the reason as she's no credit history?

izools

Lloyds TSB are also known for having a totally bizarre internal credit scoring system; e.g. I held an account with them for some time and one day they went from offering me no overdraft to pre-approval for a #3,000 overdraft... No change in account conduct or turnover when they offered it to me.

Never did get a Credit Card offer, though. I wouldn't worry about it, just apply elsewhere.

If it's her first credit card I would suggest the Barclaycard Initial:

http://www.barclaycard.co.uk/personal-home/cards/initial/

And / Or the Capital One Progress:

http://www.capitalone.co.uk/creditcards/progress-credit-card.jsf

Taking out those cards will start building repayment history on her credit file and may even result in Lloyds offering her a card in 6-12 months time.

Remember the Capital One Progress and Barclaycard Initial are comparatively high interest rate cards, so it is inadvisable to use them for borrowing, only spend what she can repay each month and best bet set up a direct debit for the full amount to be taken automatically each month.

Good luck, and let us know how you get on