Credit card application - does income matter?

James28

Hi,

I was wondering to what extent income plays a role in credit card applications... Are there any "unofficial" thresholds for each type of credit card?

I just applied for two credit cards - Barclays Simplicity and Lloyds Platinum - and both were declined by the automated system. No explanation, no "we will contact you later"... Just "Sorry, we can't offer you a credit card".

So I was thinking whether they just looked at my income and said no because it was below their range.

My Experian credit score is 920, which is pretty good as I understand it. I am earning 30k pre-tax, been with the same company for 4 years. Also I am on electoral roll, have an overdraft with Lloyds for 1000 GPB, never missed a payment...

So I started having suspicions you need at least 40k to qualify for credit card.

Any thoughts?

Bravehearted_2

Yes it matters. Most cards have a qualifying income criterion which they state - and you should read before applying.

The cards you applied for a prime and it doesn't look like you have any existing credit cards so your history is probably quite thin.

Your 920 score means very little by the way.

YorkshireBoy

James28 wrote: »

Any thoughts?

Both cards you applied for are considered 'prime' cards.

Some thoughts:

Your credit report shows something you're not aware of?
A financial associate has a less than ideal credit history/file?
Too many addresses in recent years?
No current credit card, or never had a credit card?
Not long in current job?
Not at current address long enough?
Renting, rather than owning, your residential property?

...are all factors that go into the mix.

James28

Thanks! I now see the Barclays Card in particular recommends to apply with an excellent credit rating. I didn't notice this before, as these cards were recommended through the Experian page, which should supposedly recommend the cards based on credit score.

But I am not sure the cards really state the qualifying income? I looked up most popular card on Lloyds and Barclays, and there is no mention about income.

Yorkshire: true, no existing credit card. Rent, live for a year in a current place.

So I guess I will have to apply again after some time.

YorkshireBoy

Some providers list the minimum salary in an eligibility section.

With some others you have to start an application to see it.

Barclaycard have a feature that will give you an indication of likelihood of acceptance...

https://letmechoose.barclaycard.co.uk/?source=cchubrhnavhd2

Nationwide also have such a feature.

Neither affect your credit rating.

This table shows a few minimum income figures, though always check with the card provider directly as these things can change.

YorkshireBoy

James28 wrote: »

...these cards were recommended through the Experian page, which should supposedly recommend the cards based on credit score.

Well thankfully you didn't part with money for that advice/recommendation...tell me you didn't!

Or your [STRIKE]credit score[/STRIKE] made up, meaningless number, for that matter!

James28

I did check that webpage from BarclayCard, and it gave 70-80% likelihood. So I guess I was in another 20% then...

YorkshireBoy wrote: »

Well thankfully you didn't part with money for that advice/recommendation...tell me you didn't!

Or your [STRIKE]credit score[/STRIKE] made up, meaningless number, for that matter!

Didn't pay anything specifically for the "advice", but subscribed to Experian credit monitoring service. Will likely cancel after a month, but will see... I am a little bit upset now that these two applications will lower the credit score slightly down. Although probably insignificantly...

YorkshireBoy

James28 wrote: »

I am a little bit upset now that these two applications will lower the credit score slightly down. Although probably insignificantly...

2 applications in quick succession, followed by a third will raise alarm with the third choice provider as you may appear 'desperate' for credit.

What exactly does your credit report say?...eg accounts, ER status, searches, financial associates, etc.

Experian isn't the only CRA. Barclays may search Equifax (and/or CallCredit), so maybe you should see what those reports say about you?

Why don't you apply for a credit card with the bank that receives your £30K salary? Surely they'll be more accommodating?

James28

YorkshireBoy wrote: »

What exactly does your credit report say?...eg accounts, ER status, searches, financial associates, etc.

It says: 3 positive factors, and 1 negative factor. Positives being low unsecured lending balance, low number of credit accounts and no recent searches. Negative is the age of account, as I previously worked abroad.

I also applied with my main bank - Lloyds - but they declined me. Perhaps Lloyds was the most surprising result. On the other hand, I already have overdraft with them - so it would make sense that they want to limit their risk. But they are not really great with offers for existing customer. For a brief moment, I even had a controversial thought, maybe their algorithms are intentionally designed to discourage giving credit cards to customers that already have an overdraft. They would rather have me using an overdraft and charge the 5 GBP monthly overdraft usage fee plus interest, rather than give a credit card, and get nothing in return, provided balances are paid each month.

As for 3 applications in a row... I don't know... I think I will still apply again. This idea about someone looking "desperate" may look logical, but I am not sure there is proof that banks actually over-analyze the application timings. I mean, 2 applications in a week time, or two application in 5 minutes - the message is the same - someone wants a credit card...

meer53

3 applications in a row in a short space of time ? It makes a lot of difference ! You DO look desperate and banks DO actually do this.

CRISPIANNE3

quote I also applied with my main bank - Lloyds - but they declined me. Perhaps Lloyds was the most surprising result.unquote

Might be an idea to phone Lloyds to find out what your internal score is and then may give you an indication as to why you were declined.

If you are a good customer I would have thought it was in their interest to keep you.