How can a CC company tell if you've been declined credit?

seriousDFW

I was just wondering...

I received a letter from Sainsbury's inviting me to apply for their credit card. I don't want it, but I was intrigued by one of their criteria for applying, that you must not have been declined for credit in the last month.

How can they tell if I have or haven't? I know they can see if I've applied for credit as there will be a search on my files, but surely there is no way for them to know if the application was successful or not?

Or are they relying on the credit account appearing on the files if successful? But this might not happen immediately so isn't very accurate.

Fruit_and_Nut_Case

I think you've summed it up quite accurately. :T

immoral_angeluk

They could guess. Your credit file will show a search on your file. If there's no linked open or settled account they'll presume you were declined.

bengalknights

Its based on searches ie 5 searches in one month and only one account in one month would mean 4 declines

BugsyBrowne

I think credit credit searches in ones report is defiantly the hidden killer when getting turned down, no one knows how many are acceptable but I would say no more then 2 a year.

seriousDFW

BugsyBrowne wrote: »

I think credit credit searches in ones report is defiantly the hidden killer when getting turned down, no one knows how many are acceptable but I would say no more then 2 a year.

Why would you say no more than 2 a year? In my experience that is utter rubbish - the number of searches is ONE element of a lender's decision-making process. If all other elements are bad, then lots of searches could also be bad. If an applicant has no issues whatsoever, and lots of 'plus' points on their application, many more searches than 2 would be acceptable. It's all about the big picture of your credit-worthiness, and so different numbers of searches will impact decisions by different lenders for different applicants very differently.

chattychappy

Perhaps too much is being read into this.

I don't see how they can know except by educated guesswork. I reckon they just see themselves as a prime lender and it might be as much as avoiding wasting time/expense as being a "criteria". Ie they are saying if someone else has turned you down, then chances are we would too.

Or they want to discourage such applicants, whether or not they can actually "check".

seriousDFW

chattychappy wrote: »

Perhaps too much is being read into this.

I don't see how they can know except by educated guesswork. I reckon they just see themselves as a prime lender and it might be as much as avoiding wasting time/expense as being a "criteria". Ie they are saying if someone else has turned you down, then chances are we would too.

Or they want to discourage such applicants, whether or not they can actually "check".

This sounds sensible, thanks. I don't see any way of them being able to deduce accurately since credit files aren't updated in real time.

stclair

I do referral underwriting and its not possible to tell as the CRAs data is not real time. You can try and guess but it would quiet difficult.

BugsyBrowne

seriousDFW wrote: »

Why would you say no more than 2 a year? In my experience that is utter rubbish - the number of searches is ONE element of a lender's decision-making process. If all other elements are bad, then lots of searches could also be bad. If an applicant has no issues whatsoever, and lots of 'plus' points on their application, many more searches than 2 would be acceptable. It's all about the big picture of your credit-worthiness, and so different numbers of searches will impact decisions by different lenders for different applicants very differently.

But who and why would someone want to apply for more than 2 lines of credit in one year when stability is meant to be key.

Most new customer credit card deals range from 12 to 22 months so why the credit searches.
So yes it is a while guess and as this is a money forum most answers come from quess's or past experience not actual facts I'm afraid.

pvt

BugsyBrowne wrote: »

.....no one knows how many are acceptable ......

Hmmm. I'd hazzard a guess that the lender you're applying with knows how many.