Available credit & ratios

TheGenerus1

I have littlewoods & Very catalogues both with £1600 credit each. Are catalogues regarded in the same catagory as credit cards when it comes to my overall available credit.
I say this as I have 4 credit cards wih overall £3900 limit cumulative.
My credit utilization on the cards is unfortunetly about 70%.

I thought I'd get a couple of catalogues in the hope that this will lower my utilization ratio (started at £1000 limit each and then went up to £1600 after 3 months).
I wanted to do this as all my credit cards are sub prime with big interest rates (3 cards had for 2 years and 1 card had for 9 years with no late or missed payments in that time) and I wanted to apply for a balance transfer card with a lower APR but have been declined (always gone through to a underwriter then declined) as I think my ratio may have been to high.
Now that I have the catalogues, do you think this will be included in my overall available credit effectively boosting my credit rating?

Credit cards limit = £3900 + Catalogues limit = £3200
= £7100

Credit cards balance = £2800 + Catalogues balance = £200
= £3000

Does this mean having the catalogue drops my available credit ratio to about 40% instead of the 70% without the catalogues?

Many Thanks

Tixy

It will have dropped your overall debt to available credit ratio, but not the individual ratios on your accounts. Potential lenders will look at both - i.e. if each credit card is maxed they'll still see that.

Potential lenders also look at your income to total credit ratio, which is obviously quite a bit higher than before you opened the catalogues.

Its impossible to determine exactly what each lender is looking for and which of those 2 ratios they are more sensitive to.

TheGenerus1

Tixy wrote: »

It will have dropped your overall debt to available credit ratio, but not the individual ratios on your accounts. Potential lenders will look at both - i.e. if each credit card is maxed they'll still see that.

Potential lenders also look at your income to total credit ratio, which is obviously quite a bit higher than before you opened the catalogues.

Its impossible to determine exactly what each lender is looking for and which of those 2 ratios they are more sensitive to.

My philosophy behind getting the catalogues which in turn would decreases my credit utilization to 40% instead of the 70% that I had before, would allow me to get an automatic acceptance straight away as opposed to a referral to a underwriter which I was previously getting.
I thought that the potential lenders were referring my application instead of instant acceptance because of this utilization problem. When they refered my application, Only then were they able to see how these balances were spread.

Do you think to get an instant acceptance online rather than a referral they look at overall debt to available credit ratio first and if it is too high then they refer your application? and do you think that having an overall lower debt to available credit ratio will be better for an instant acceptance without referral?

Again many thanks for any help and advice.

Tixy

No I don't think thats a particular issue that causes a referral or instant decision, I think that its a combination of everything on your report and on your application.
Its possible it could mean that with a particular lender you may get an instant acceptance. Its also possible that with the increased overall credit you might get a instant rejection.

Its not an exact science that its possible to manipulate to get an acceptance, thats why lenders don't say specifically why a person is declined or referred. Some lenders may prefer your report/information as it looks now, some might think it looks worse now than previously.