Why can't I get a credit card?

DazedConfused_2

Hi,

I'm 30, but have never had a credit card before. I wanted to get an AmEx for the air-miles, but have been rejected! Any ideas why? My salary is >30K, I pay all my bills by direct debit, I'm on the electoral roll, I don't have any debts, and I have a load of savings. Am I not risky enough to be worth it? Do they know I'll pay off the balance every month, and just milk the air-miles?

Will this affect my ability to get a mortgage in future, and how do I make it better?

I've applied with Credit Expert for a check, but I'm terrified it's going to show something that's going to cause a load of problems down the line!

Thanks!

izools

You say you don't have any debt -

Do you have any other credit cards now? Have you ever?
How long have you been in your job / with your employer / with your bank?

This won't affect your ability to get a mortgage.

But things that will cause you to be declined, if you've no debt and always paid on time are:

> Lack of credit history
> To much available credit - lots of unused / dormant credit lines
> Having opened an an account recently
> Having moved house recently
> Having moved bank recently
> Having moved employer recently
> Too many recent credit searches
> Being financially associated with someone who has poor credit

Hope this helps

EDIT: 'Recently' means something different to different creditors, and the effect is cumulative.

So, say for example you've had your job, current address, and current bank account for five years. If you change bank, you shouldn't have trouble getting credit after six-nine months. But if you move AND change banks or job, you might not be able to pass a credit check on a decent credit card for 12-18 months.

Also, MBNA consider a "new" account to be one under 18 months old. But, HSBC seem not to mind so much about accounts opened recently IME.

Fruit_and_Nut_Case

DazedConfused wrote: »

I wanted to get an AmEx for the air-miles, but have been rejected!

You are aiming high for a first credit card. AmEx tend to be quite picky and you are more likely to be accepted by them after you have built up a good track-record with some of the less-choosy providers.

DazedConfused_2

Hi,

I moved house 1 year ago - before that I was in the same place for 8 years. I have been employed in the same place for 5 years. I have had my current account with the same bank for 14 years. It does actually give me a credit card, but I have only used it once or twice, and paid immediately - it's the only credit line I have. I have some ISAs dotted around, that I opened this year - would that matter? In terms of being associted with someone with bad credit, or lots of credit searches - nothing that I can think of.

What is lack of credit history? That sounds most likely, and how do I fix it if I can't get a credit card?

Thanks for your help.

scottishblondie

A lack of credit history is just that - you have no historical evidence to show you can handle credit. Your savings make no difference, they don't show up on your credit report. Since you do have a credit card from your bank, start to use it to build up a history. Use it for normal spending (groceries, petrol etc) and set up a DD to pay it off in full every month.

izools

It sounds like you need to use your existing credit card more - use it for your day to day groceries and travel costs - things you'd buy anyway - and pay it off in full each month - when the statement is produced not the second you spend.

Continuing to do this will put data on your credit file demonstrating that a) you'd actually bother to use a credit line, and b) you'd use it responsibly.

AmEx won't want to give a card to a customer with a proven history of not using their existing card.

Once you've used it more on a day to day basis for six - twelve months, re-apply, you should be OK.

FINALLY - does your credit card actually show up on your credit file? You might need to change the address for that separately to your current account which mightn't have been done a year ago when you moved.

CLAPTON

ask you bank for a credit card
use it regualrly for every day things (maybe petrol/food etc)
pay in full each month without fail ; maybe set up a DD for the full amount so you never forget

this will build up a credit file showing you handle credit well

DazedConfused_2

So I'll just start using my VISA credit card supplied by my bank for normal purchases - e.g. Sainsbury's. I've already got a direct debit set up to pay it off automatically each month.

Thanks everyone!

Does it matter that the card is from a small, relatively unknown bank? How do I check it can be picked up by the credit agencies?

Any idea how long this will take - I really want the BMI AmEx card for the miles? (Someone said 12 months! That's like 2 years! )

coolesticeking

Because you say you have a lack of credit, start with a Capital One Classic or Barclaycard Initial card until you build your credit score up before trying to apply for other cards.

DazedConfused_2

coolesticeking wrote: »

Because you say you have a lack of credit, start with a Capital One Classic or Barclaycard Initial card until you build your credit score up before trying to apply for other cards.

Would they be better than the VISA from my bank? Does the credit limit have any effect? I think the one on my card is currently about £3000.

And I don't understand why the financial system in this country punishes me for having savings - poor interest rates, can't get a credit card..... I can clearly handle money, but I have to prove that I can handle credit.

coolesticeking

DazedConfused wrote: »

Would they be better than the VISA from my bank? Does the credit limit have any effect? I think the one on my card is currently about £3000.

And I don't understand why the financial system in this country punishes me for having savings - poor interest rates, can't get a credit card..... I can clearly handle money, but I have to prove that I can handle credit.

Sorry I missed your post above, if you already have a card from your bank then there would be no need to try and get a Barclaycard/Capital One card.

Just ensure that you keep up to date with the card you have - As others have said to get AMEX they do have very strict credit criteria.

The problem with savings, it does not matter if you have a million to be honest they don't appear on your credit record as savings accounts are not a credit-scored product.

If your current account and credit card from the bank is the only two forms of credit at the moment, my only suggestion maybe might be a mobile phone contract / store card / catalogue account / another credit card and always keep up to date with these.

Overtime, it shows you are good with credit and the longer you stay this way the more offers you are likely to get in the future. But being good even with green ticks each month does not guarantee you credit, it's up to the lender if you are the 'ideal customer' and people with perfect credit ratings have been declined before. It's something which you can't take personally - they are a business and they have the choice who they accept as a customer.