What to do

mr-angry

Basically I will be looking to get a mortgage in the near future and I do not owe money as I tend to save for purchases rather than borrow which it seems makes me a poor risk as I don't have a credit history. I am in full employment with the same employer for the last 23 years on a comfortable salary (£36000) and my current account is comfortably in the black.

I was advised to apply for a credit card and use it regularly for everyday purchases paying it off every month in full. Okay I thought so I applied to my bank (Santander) for their cash back card and was rejected. The letter stated that this may be due to me either failing their credit scoring system (which I understand from the boards that this is top secret!!) or that my file held by Experian may have some reason for my refusal.

I paid £2 to Experian for my file and it came showing no issues at all. It basically shows that:
I am on the electoral roll
I have 2 mobile phone contracts with 3 for last 15 months - no issue
It also shows I made a final purchase payment on my car in 2007.

What I want to know is whether to bother appealing the Santander refusal, make a further application from another card supplier to possibly be refused again, or go down some other route to build a good credit score (which I thought I had)?

I forgot to mention I also have a further mobile phone contract with Tesco but that doesn't show on the Experian report.

ses6jwg

Do you have an overdraft on your current account?

If not might be worth arranging a small one even if you don't use it.

Then look to apply for a sub prime card with Vanquis, Aqua or similar. High APR but pay the balance in full each month and it will aid your credit history.

If you are rejected for a sub prime card might be worth looking deeper at your credit file. Also be sure not to apply again for another card for 3-6 months as lots of applications also damage your file.

Money4me

Hi sorry to hear you got turned down, from what you said there shouldn't really be an issue with you getting a card from Santander especially if you bank with them maybe get a copy of your credit report from equifax as well as I have read on MSE that some parts of the report can be different eg. your tesco phone contact may show up on equifax but not on experian and also possibly any information that may be the cause of rejection.Then talk to both CRA and Santander as you don't want to be in a credit rejection spiral. Sorry I can't be of any more help but that may be the place to start.

cos_2

I think you are more 'unknown risk' than 'poor risk'.

But don't mortgage companies have a different approach than credit card companies? Perhaps the more knowledgeable members can help out here, but in my experience the mortgage lenders have allowed me to submit direct evidence of my employment and salary. I'm sure they also carried out a credit reference agency check as well, but that would have shown I didn't have excess/additional debt that might upset them.

Can you tell us why you were recommended to take out a card, and by whom (e.g. financial advisor, friend, this web site)?

mr-angry

I have a £900 overdraft facility in my current account but have not used it for about 6 months.

The reason I looked to Experian was because Santander stated that they use them. Oddly enough however when I looked at the Experian report the only check made on my file was by me asking for the report last week. I would have thought a Santander check would have shown up here.

I was speaking to a colleague at work who`s wife was previously a bank manager and it was her who suggested the credit card, but at my own bank.

Thanks for the quick responses.

cos_2

I suspect the key requirement is getting a mortgage and not necessarily getting other credit!

I do appreciate your friend's advice about starting up a credit history, of course, but I wonder if it would make more sense for you to go to a mortgage broker who specializes in this area? If all the sums add up (steady employment, good salary, no adverse credit history) I would think they would be able to locate a reasonable mortgage deal for you. Even though it's not prime, just a few years of 100% repayment might open up some great deals.

mr-angry

Just a quick update. I applied online for the Tesco Clubcard credit card and to my surprise it told me immediately that my application had been sucessfull. How can it give an instant (literally 5 seconds) decision, I thought they all ran a credit search on all applications.?

thomasdown

mr-angry wrote: »

Just a quick update. I applied online for the Tesco Clubcard credit card and to my surprise it told me immediately that my application had been sucessfull. How can it give an instant (literally 5 seconds) decision, I thought they all ran a credit search on all applications.?

You have nothing to worry about if Tesco's have accepted you especially instantly! (they are one of the hardest to be accepted for) Just pay your credit card in full every month even though you have 0% for 15 months I believe! What you have to be careful with now though is if they see any big purchases when you're applying for a mortgage they will question it. They did with me anyway! I just said though it was TV etc for the house which was the truth anyway and if you look at the end of the month I always pay in full! Because I got the tesco clubcard credit card aswell and explained that I don't pay cash for things I pay by credit card to get clubcard points then pay in full each month and the underwriters were fine with it!