Credit declined - not sure why!

CaptainSaver

Hello all - long time reader, first time poster

I'm after a bit of advice since I was just declined credit and can't really figure out why.

The amount of credit I sought was about £4000, (total value of item around £6000 - i.e. 75% financed) over a term of 4 years giving repayments of c. £90/month.

The lady in the store could offer no explanation but suggested I emailed an address at barclays-loans.com (they were the credit providers) - I've done this, but have not yet had a response (thought it was only earlier today).

I've just paid my £2 to check my Equifax report and nothing jumps out at me as being the culprit - a quick summary of what's on there:

I'm on the electoral roll and have been for 9 years.
Lived at current address 15 years.
2 credit cards paid off in full every month, no late payments (only one actively in use over the last year)
mortgage with 2 years of payments never late or missed
2 banks accounts with a credit element (overdraft facility), but I'm not in debt to either.

On the application she did originally spell my first name incorrectly (one letter out), but she said that she rang the company and that it was still declined.

The only slightly strange thing is my mobile phone contract - the last 6 months flagged up as "not updated". I'm assuming this is because I was out of the country for that time and asked that my contract be suspended for that time (it's a service they offer).

Could that be the reason I got declined? It seems a bit wishy-washy.

I'm just struggling to see what risk I am of defaulting having never done so in the past and am employed in a stable job earning around £55000 a year! The repayment would be less than 2% of my gross monthly income!

Any advice is much appreciated, thanks in advance.

CaptainSaver

[Deleted User]

personally i cant see why someone with so little debt and such a large salary would need to borrow so little money?maybe they were thinking the same?

CaptainSaver

Thanks for the reply.

It was an interest-free deal - 0% over the 4 years, so there was an incentive to take it.

goaroundnow

Hi

I don't think a lender will worry why you are borrowing a "small" amount of money on a large salary. I, personally, don't think £4000 is a small amount of money either.

What are the credit limits on the cards?

Even though they are paid off in full, what do the balances show as reported to Equifax?

CaptainSaver

5200 on one, 6800 on the other.

All the balances etc seem to match up and there's a string of green lights for each month over the last 4 years since I've had the cards.

In response today (after the decline) I cancelled the card with the 6800 balance as I'd not used it in a year and figured that may have been a contributing factor?

It's all just pretty annoying!

goaroundnow

Hi

The combined limits wouldn't immediately strike me as being a problem unless, perhaps, your mortgage payment (even though on time) was very high.

I asked about the balances that were reported as if they were close to the limit, this could make your credit utilisation ratio high, which could hit your credit score. If you were not using one card, though, this is probably not the case.

I think credit-scoring is crazy and often makes no sense. From your precis of your Equifax report, I would have thought you would have been a good candidate for credit.

A string of 6 successive "no update" statuses could provide a clue, I suppose. It COULD be that scoring systems find more than a couple of them a problem. This could, perhaps, be because it is known that they indicate (on a mobile contract) that you have been living abroad and/or there is another problem with the account.

opinions4u

goaroundnow wrote: »

I don't think a lender will worry why you are borrowing a "small" amount of money on a large salary.

They do. Although I'd be surprised if it was a consideration on a 0% deal.

I think the typo remains the big issue here.

The_Boss

CaptainSaver wrote: »

Thanks for the reply.

It was an interest-free deal - 0% over the 4 years, so there was an incentive to take it.

I think there is your answer combined with salary/lack of debt. Lack of potential for them to sell you other interest making products off the back of this. Chances are that this was going to be stashed in an ISA or other interest accruing account for you to make a nice profit out of them.

There is more to credit scoring than just affordability.

ReadingTim

The_Boss wrote: »

There is more to credit scoring than just affordability.

Indeed! - it's as much of an indication of their ability to make money out of you as your ability to afford/repay.

This is why people have limited success challenging lending decisions - ultimately it's a commercial decision by the lender, and some have simply decided that they don't want you as a customer.

Hazzinho

Check all 3 CRA's, not just one, are you financially associated to anyone? If you pay off your cards in full get shot of one, the main reason might be because you pay the balance in full that they're not interested, they want to make money off people.