Nationwide Soft-Search

jpb77

notmyrealusername wrote: »

Total credit limits spread over 3 x credit cards and 1 x Argos card = approx 9k

Total amount of credit used is something like £1300 over all cards but each card is paid of in full every month aprt from the Argos card which is £400 on a 0% buy now pay later deal. I wonder if somehow they have data about my past IVA/defaults even though it's not showing on report any longer.

As I've said I don't need credit but was testing the water after my defaults and IVA were no longer showing, it's worrying for a future mortgage application in a few years time though as that's what the credit building has been all about!

Ok this gives a clearer picture. 30K salary with 9k available credit. 30% salary to credit ratio could be over their lending ratio criteria for this month (they change this on a monthly basis). This is what they could of based the decision on PLUS, depending on your other commitments i.e. rent / mortgage they will take this into consideration as part of your outgoings then assess all this information, depending on their score card they use which changes every month and you could be seen as you do not need further credit at this time.

Also debt to income ratio is taken into consideration which in your case is approx 52% which is average to high and this could be another factor as well. (£1300 monthly balance with £2500 (gross monthly income based on 30K)

Lenders look at this ratio when they are trying to decide whether to lend you money or extend credit. A low DTI shows you have a good balance between debt and income. As you might guess, lenders like this number to be low -- generally you'll want to keep it below 36, but the lower it is, the greater the chance you will be able to get the credit you seek.

Also they have seen your aggregated balances, which to them is not worth considering for a balance transfer as they are spread out over 4 different facilities plus you pay in full every month, of which they don't see making any money from you either and this could be another decision making factor.

Hopefully this will give you an insight to why they might of declined you. As you can tell score cards are very complex with these considerations plus loads of other factors.

You could close one of the CC accounts down as 3 CCs is seen as more than adequate access to credit.

They won't see you having IVAs etc before if they do not show on your report when they take a snapshot at the time of the application.

At the end of the day you could have a perfect credit history but they also want you to be their perfect customer where they can make a profit from you as well. If they don't, then they won't have you!

notmyrealusername

Thanks, that's a really helpful insight. I am loathe to cancel one of the credit cards as the oldest card (Vanquis but have never paid a penny interest!) dates from 2010 so if I cancel that I lose the longevity of a well run account.

The Sygma/creation cards have a reasonable APR so wouldn't want to cancel either of those, especially seeing as I'm not as credit worthy as I'd hoped and it seems would struggle to replace them if needed! I actually found it easier to gain credit with the defaults and completed IVA on my record than I have with a 'clean' report!

Am thinking I'll perhaps try the soft search again in 6 months as I read an earlier post from an ex IVA person and they got a much better quote after being rejected earlier.

jpb77

notmyrealusername wrote: »

Thanks, that's a really helpful insight. I am loathe to cancel one of the credit cards as the oldest card (Vanquis but have never paid a penny interest!) dates from 2010 so if I cancel that I lose the longevity of a well run account.

The Sygma/creation cards have a reasonable APR so wouldn't want to cancel either of those, especially seeing as I'm not as credit worthy as I'd hoped and it seems would struggle to replace them if needed! I actually found it easier to gain credit with the defaults and completed IVA on my record than I have with a 'clean' report!

Am thinking I'll perhaps try the soft search again in 6 months as I read an earlier post from an ex IVA person and they got a much better quote after being rejected earlier.

No problem, try to look and bring your monthly balances down to £900 across the board over the next 6 months, this will bring your DTI down to the threshold of 36% and this may have a positive factor but I cannot guarantee this but lower the DTI will help. Also close the CC account down which you do not use. Also having a settled CC account on your report will show a positive factor too.

notmyrealusername

jpb77 wrote: »

Also debt to income ratio is taken into consideration which in your case is approx 52% which is average to high and this could be another factor as well. (£1300 monthly balance with £2500 (gross monthly income based on 30K)

Lenders look at this ratio when they are trying to decide whether to lend you money or extend credit. A low DTI shows you have a good balance between debt and income. As you might guess, lenders like this number to be low -- generally you'll want to keep it below 36, but the lower it is, the greater the chance you will be able to get the credit you seek.

jpb77 wrote: »

No problem, try to look and bring your monthly balances down to £900 across the board over the next 6 months, this will bring your DTI down to the threshold of 36% and this may have a positive factor but I cannot guarantee this but lower the DTI will help. Also close the CC account down which you do not use. Also having a settled CC account on your report will show a positive factor too.

Hadn't heard of a desired DTI figure before so have just googled and on the sites I've read so far it says that DTI is calculated using the minimum monthly repayments on a credit card - not the outstanding balance.

If that's the case then the min payments on £1300 of outstanding credit would be £65 (assuming min payment was 5%) meaning my DTI is less than 3% !

RichL74

Actually now we know more about your credit history, I dont think the soft search function failed you. Would have been nice to have known this before you went ahead but never mind. If I'd seen what I have read above that you posted since, I wouldnt have suggested clicking the apply button.

Good luck. Sorry I am not trying to sound patronising.

notmyrealusername

RichL74 wrote: »

Actually now we know more about your credit history, I dont think the soft search function failed you. Would have been nice to have known this before you went ahead but never mind. If I'd seen what I have read above that you posted since, I wouldnt have suggested clicking the apply button.

Good luck. Sorry I am not trying to sound patronising.

notmyrealusername wrote: »

Just wondering what people think the chances are...

History:

100% clean credit file with no defaults/past IVA showing (defaults dropped off two weeks ago). Lots of green dots for current credit cards, mobile phone etc 30k salary, electoral roll for 4 years, same job for 7 years, same bank for 6 years.

Did the soft search back in May (when 4 defaults were showing) and got quoted £1000 @ 19.9%

Now that all defaults are off my file I have done another soft search and got quoted £1800 @ 19.9%

I recently applied for a £500 overdraft with my bank (Natwest) and got declined - despite having had account for 6 years and having never gone a penny overdrawn. Strangely enough they don't appear to have searched my credit files so I'm still showing as 0 searches though.

Now I don't 'need' a credit card, I'm just looking to replace the sub-prime, which I always pay off in full on receipt of the bill, with prime but after all this time of rebuilding my credit history it would be a blow to be declined mainstream so am happy to wait if people think the £1800/19.9% is likely to be a decline!

Err, I posted full history including previous IVA and defaults on my first post on this thread asking for thoughts! (above)

I appreciate people's comments and thoughts on this and hold nobody responsible for the decline - if you don't shoot you don't score Will try again in six months and see whether anything has changed in Nationwide's eyes.

RichL74

You never mentioned in that post that you had 3 cards like you mention in post # 281.

However like you say, try again in six months if you are not desperate. If you did mention it then sorry, it's been a long week.

notmyrealusername

RichL74 wrote: »

You never mentioned in that post that you had 3 cards like you mention in post # 281.

However like you say, try again in six months if you are not desperate. If you did mention it then sorry, it's been a long week.

I did say about the cards (before I clicked 'apply') in post #268 though...

notmyrealusername wrote: »

I have three credit cards - two creation and one Vanquis with 6k limits between them. Only ever spend about £300 on each one every month and pay the bill off in full on receipt.

I always try and give as much info as possible when asking for thoughts/advice/help as I know how infuriating it is to spend your time helping somebody and then they come back with 'oh, I didn't mention XXX'! which means the advice you agve was meaningless! I really do appreciate people taking the time out to give advice :beer:

RichL74

Okay, like I say, long week

jpb77

notmyrealusername wrote: »

Hadn't heard of a desired DTI figure before so have just googled and on the sites I've read so far it says that DTI is calculated using the minimum monthly repayments on a credit card - not the outstanding balance.

If that's the case then the min payments on £1300 of outstanding credit would be £65 (assuming min payment was 5%) meaning my DTI is less than 3% !

No, your getting confused. Your total debt balance is circa £1300 this is the debt which is calculated for DTI not based on minimum payment as you suggested. So what I have advised earlier still stands. Each lender has a different min payment criteria so your idea of a calculation based on min payment would be difficult to devise. However, the DTI you calculated is not a true reflection and depending on which sites you've visited some would include your min payments PLUS the recurring balances data as well but inputting the min payment details will not effect the DTI %. Some sites may offer different methods but overall your DTI will stay the same regardless of the data acquired.

Lenders will always base your DTI on recurring debt balance against income and not monthly payments against income.