Advice needed in how to avoid being rejected for possibly being too good a customer

torrenter

Hello everyone. I'm thinking of applying for the Halifax Clarity Card, and will have a 'perfect' record according to the CRAs when applying. I will be hoping for the 12.9% rate, and using this card for the perks and to replace my HSBC one. I know the laws have been changed and less people will get this rate, so I'm using the theory that the tiered rate will be dependant on the CRA scores.

My concern is, could I be rejected? If I am, for too good a credit file, what do you think I could do to be successful when reapplying a few months later?

I never normally have to hand over interest, but should I? Could anyone recommend a tactic that they might have used. Is a £1 a month enough, or is 50p fine. Should I hand over this interest for 6 months before reapplying?

Tixy

Its not necessarily the case that less people will get this rate. Its more likely the same number of people will get that rate and that more people will get accepted with a higher rate when they would have previously been declined the card.

You won't be rejected for having a 'perfect' record with the CRAs.
You might be rejected or given a higher rate based on the other information they will ask you and take into account that is not part of the CRAs files.

The_Cappuccino_Kid

I applied for a Halifax Clarity card about three months ago.

I always pay my cards off in full and never pay interest.

The result: I was accepted at 12.9% with a limit of £9700.

torrenter

Thanks Tixy. I thought I was putting two and two together. Three rates, lowest one for Excellent CRA score, then the higher one for Good score and the highest for poorest score. 21.9% would be a massive downer on getting the card. Even if I never pay interest. I've spent a year trying to get my score back up. I've been told I'm obssessed with it, lol.

But given that the Credit Reports seem to me to have everything on you except your salary, why do you think they or any other lender might reject someone or give them a higher rate. There must be some logic in it, or is that wishful thinking?

torrenter

Hey Cappucino Kid. Hope you don't mind me asking but did the limit they give you have any reflection or relation to your earnings, do you think? I just want to get at least a grand limit to cover for things like more expensive purchases. My HSBC card has a limit of £500 from student days 6 years ago. I really don't know how generous these CC firms are in the wake of the recession.

scottishblondie

Like Cappucino Kid I always pay in full and have never paid interest, and I have no debts. I was also accepted for the Clarity at 12.9%, £3150 limit. This is the highest limit of any of my cards, but I don't see any direct relationship to my income (~£22k).

They reject people and set rates based on internal scoring of some kind, they will look at your debts, available credit and salary and arrive at it somehow from that. No-one can say exactly how.

Tixy

Credit report 'scores' also don't take into account your age, your occupation, your length of time in your current job, whether you are employed or self-employed or unemployed etc, so there are a lot of other risk factors a lender will consider not just your income and credit history.

I'd think if you were accepted you'd be unlikely to get less than £1k limit on a clarity card.

torrenter

Thanks scottishblondie. Like both yourselves, I have no debts and have never paid interest. I wonder how much Credit I could get on a 15k salary and already having modest £500 total and available credit. I guess I'll just have to wait and see.

torrenter

Thanks again Tixy. Yes I clearly missed those details:) In that case, as the CRA reports and scores derived lack those details how can the lenders, if they actually do, verify your employment and income status. Instant Credit approvals/rejections over the phone seem to take too short a time.

izools

They don't actually verify your eployment and income status.

They use a database held by a company called National Hunter, which records details of the information you've provided on all previous applications for anything credit scored. They then give the creditor concerned an indicator of how reliable the information entered on the application is, so if they have no prior application details, the creditor may refer the applicaion and ask for proof.

Or if the details don't tie up with a prior application they may decline or ask for further information - so if you change job, but say you've been in your new job for five years, when N Hunter can see you put the details of a different employer in on an application made just two years ago, this could cause a decline and / or the creditor to ask for more info / proof.

torrenter - do you have credit history? If you've had a credit card with a £500 limit for six years and always used it but not paid interest in that time, and haven't taken out any new accounts in the last year, then you'd be a creditors wet dream. You should be approved for all and sundry as long as the rest of your details demonstrate stability (residential status, marital status, employment status, time with employer / bank / at address, etc).

torrenter

Thanks for that info izools. Quite useful.

Yes I do have a Credit history as I have used that card with a Current account and it's £1000 overdraft from HSBC since 2001. I recently cancelled the overdraft a few months ago, as I hardly used it and wanted to apply for this Clarity card to eventually replace the HSBC one. I didn't think having £1000 of permanently unused credit was a good thing.
My theory in what I thought a potential lender might think, was "If he never uses the Credit available the account given won't be profitable"

The last time I applied for a "Credit-type" account where a search was left on my file was the beginning of last February when I opened a Flexaccount, and before that at Christmas a Barclays Current account. There were different reasons for having the two extra accounts. When applying for these accounts I gave the employers details and my salary details.

The situation where I am at now, is that I've very recently left the company. I was there for just over 3 years, on approx 15k. My last pay was end of December, and obviously I urgently want to get the Clarity card before travelling soon. But I don't just want it for travelling. The 12.9% I might get would be far better than 18.9% with HSBC.