Credit building card - declined Aqua

the-mango

Hi,

I was just wondering if I could get some advice on how I might build my credit history. Currently I am a student with a part time job (earn around £4000) a year, most of which is saved, and no student loans (although I know this doesn't come into it when applying). I have 2 overdrafts with NatWest and Santander student accounts which I use to stooze, so are both to their limit as such although I could pay them back at any time, as I'm lucky enough not to have to use that credit. I also have an Orange contract mobile phone, which I've had for about 20 months now, paid by Direct Debit so always on time.

I have previously thought about getting a credit card, just to help build my credit rating and didn't think I felt I knew enough abotu them to have one and was worried about possibly using it incorrectlly et cetera, anyway, I have now read up on them and done extensive research and thought it would be worth getting one just to build up my credit record. I applied for the Aqua one but was declined with a letter saying 'you don't fit our criteria'.

At this moment in time is it worth me
1) just leaving it for a bit, considering Aqua will have left a mark on my credit report and just leave the credit building till later down the line
2) apply for a credit card with Santander (my main bank) who can see I have savings, a current account and a history with them and are probably more likely to give me a credit card
3) apply for the Barclaycard Initial (now or in the future)

Thanks for the help!

guesswho2000

Presuming you have no adverse history, such as missed payments et al, I'd apply for the one with your bank - this will likely have a better APR than the Barclaycard Initial. One search from Aqua won't have much of an impact.

One stumbling block may be your low income, not sure what the requirements are for the Santander card, but a lot have minimum income requirements higher than the £4000 you specify, which could auto decline, so check this out first.

If Santander's criteria says no based on the income, then don't bother applying, try for the Barclaycard instead. I'd recommend only trying applying for one of these two, and if they say no, leave it for six months and try applying for a card then. Good luck with your app! :beer:

the-mango

Thanks, I'm really not bothered by the APR because I'll be paying off in full every month. I'm technically a full-time student so I do wonder what to put on forms at times, would I be better off doing this than putting I do part-time work? The issue is is that sometimes being a student or in full time education isn't an option.

chanz4

Even if free, the overdraft isn't doing you any favours

[Deleted User]

Some say house hold income, if you live with your folks.

the-mango

chanz4 wrote: »

Even if free, the overdraft isn't doing you any favours

As in I should clear them? I am using the money to earn interest in savings accounts at the moment.
If clearing them is the case then I guess I have to weigh up the amount of money I earn in interest off them with the want/need to build my credit score

YorkshireBoy

[quote=[Deleted User];54509891]Some say house hold income, if you live with your folks.[/QUOTE]And by that they mean spouse/civil partner...not parents, siblings, children, lodgers, etc.

YorkshireBoy

the-mango wrote: »

If clearing them is the case then I guess I have to weigh up the amount of money I earn in interest off them with the want/need to build my credit score

You're probably negatively affecting your credit rating by having maxed out overdraft facilities on your credit report*, because it shows (incorrectly in your case ) that you can't manage your day-to-day finances.

How much are these stoozes making you per annum?


*I'm in the same boat, having £10K of Santander money offsetting my mortgage (costs me 2.4% to save 3.75% interest).

the-mango

YorkshireBoy wrote: »

And by that they mean spouse/civil partner...not parents, siblings, children, lodgers, etc.

Thanks for clarifying this! Am not married to my parents or siblings so I'm guessing that wouldn't work...

YorkshireBoy wrote: »

You're probably negatively affecting your credit rating by having maxed out overdraft facilities on your credit report*, because it shows (incorrectly in your case ) that you can't manage your day-to-day finances.

How much are these stoozes making you per annum?


*I'm in the same boat, having £10K of Santander money offsetting my mortgage (costs me 2.4% to save 3.75% interest).

Ok, so I get 3.3% interest and I have £2500 of overdraft so that works out at £82.50. Is it worth unmaxing them out for that amount of money versus my credit rating or do I just have to decide that?

guesswho2000

the-mango wrote: »

Ok, so I get 3.3% interest and I have £2500 of overdraft so that works out at £82.50. Is it worth unmaxing them out for that amount of money versus my credit rating or do I just have to decide that?

Well, only you can decide that, would the benefit gained be worth more to you than the £82.50 you're making by, essentially, stoozing your overdraft? If so, then repay it, if not, keep it in your savings account

Stoozing always has a slight effect on your rating, as it shows up as debt, but the stooze pot does not, so creditors won't know that you have the money sitting there in an account. That said, some creditors are more lenient than other when it comes to acceptance and limits, but the exact science to their credit scoring is a mystery unfortunately!

the-mango

guesswho2000 wrote: »

Well, only you can decide that, would the benefit gained be worth more to you than the £82.50 you're making by, essentially, stoozing your overdraft? If so, then repay it, if not, keep it in your savings account

Stoozing always has a slight effect on your rating, as it shows up as debt, but the stooze pot does not, so creditors won't know that you have the money sitting there in an account. That said, some creditors are more lenient than other when it comes to acceptance and limits, but the exact science to their credit scoring is a mystery unfortunately!

I know, this whole rating thing is baffling. To be honest my relative lack of credit history and the fact that my overdrafts are like that is the reason I applied to Aqua but, as per the thread title, I was declined. That's the reason why I am hesitant to do anymore about my rating currently, I mean what could be so bad that Aqua declined me. I have checked my credit report files thing and nothing out of the ordinary on there.