The struggles in obtaining credit when you are new to the U.K.

Granariesgirl

Forgot to say in my post that I'm with Co-op, basic account, & they have been good.
Picked them after consulting MSE: it was a choice between them & Lloyds as fee-free basic accounts.
Lloyds docs arrived the day their CEO's salary was published - went straight in the bin as we refused to contribute towards such an obscene amount! :mad:

Thrugelmir

Granariesgirl wrote: »

Lloyds docs arrived the day their CEO's salary was published - went straight in the bin as we refused to contribute towards such an obscene amount! :mad:

Do you look at the other companies you directly or indirectly spend money with in the same light?

Are your salaries justified?

izools

Thrugelmir wrote: »

Do you look at the other companies you directly or indirectly spend money with in the same light?

Are your salaries justified?

With the best will in the world I don't think her salary is big enough to need justifying if she's had to open a co-operative cashminder.

Granariesgirl

Thrugelmir wrote: »

Do you look at the other companies you directly or indirectly spend money with in the same light?

Well if we didn't that would be pretty hypocritical, wouldn't it! :shocked:
It's a choice & quite often not an easy one (for some things, impossible)... but buying ethical & local when we can is part of our life now.

Thrugelmir wrote: »

Are your salaries justified?

Well, if you're asking if somebody pays us monumental amounts of moolah to lend irresponsibly to people, lose monumental amounts of money & then get the taxpayer to bail the company out while preaching responsibility to the man in the street - then the answer is no.
We don't even get twice yearly bonuses for screwing up, either!
Or even fiddle our expenses & "flip" our mortgages...
:cool:
What about you?

Cheesh, reading that back, I realise that we must be really stupid - we work hard, behave responsibly & only get paid an average amount... in fact I do stuff for FREE!
:doh:

blon

blon wrote: »

Was declined for the Capital One Classic Extra card today.

To sum it up, this is my U.K. banking history so far:

1. Sep 2012: Moved to U.K., started job immediately, opened Santander basic account with no debit, overdraft and balance cap of GBP 10K. Account is joint with partner. Household income is in the low 6-digits (both PAYE full-time employees).
2. Oct 2012: Got on electoral roll
3. Dec 2012: Got Aqua Reward Card with GBP 250 credit limit and 49.9% APR.
4. March 2013: Santander local branch thought they could upgrade me to 1-2-3 account after 6 months but got rejected by their computer. They suggested to re-try after a full year.
4. May 2013: Joined Experian Credit report for 2 months, no wrong entries, Aqua card appears, no late payments recoreded, electoral roll recorded. Score fluctuates between 760 and 820 depending on how much I use my card (high balance = lower score)
5. July 2013: Asked Aqua for credit limit increase, declined. (I assume no credit search was carried out then). Never missed any payment of course. Paid GBP 1000 per month into the account on average because of low limit, so they should be able to see that I can afford a higher limit. This did not help though.
6. August 2013: Got rejected for Capital One Classic Extra cashback card. Given reason: too low credit score. They give the possibility to appeal the decision in which case the appeal will be reviewed by a special team. As I have nothing to lose with them anymore, I will try this providing payslips and statements of my foreign cards that indicate my high credit limit and low APR.

Conclusion: It appears the decisions by many lenders are purely machinal. The credit scoring models are flawed in the case of newcomers to the UK because they disregard the good credit history they have built up in their country of origin. Reading this forum, it's easy to see that people who have lived in the UK forever but have had times of bad credit behaviour can quickly obtain high-grade financial products again. Newcomers even get declined by low-grade products. In other words: It's much much easier to rebuild good credit than to build good credit from scratch.

Plan going forward: Ask for letter of recommendation from my foreign bank I've banked with for about 10 years, as somebody suggested here, and then use this to apply for normal bank account with overdraft at high street banks that are less machinal and more human in their decision-making. Will in any case apply in September, after my 1-year anniversary of living here, regardless of my recent credit search with Capital One. I just can't wait for 6 months between each search as the thing is that one needs credit to build up a credit score. My conclusion from successful movers in previous posts is that you have to target the right banks early on who will not just look at the scores (that will be bad because you have no history) but appreciate one's financial situation in a more comprehensive manner, taking factors into account the scoring models leave out.

Further to my previous post above, I just wanted to share the good news that Capital One revised their decision in my favour. I had sent an appeal including supporting documentation (payslip, foreign CC statements giving evidence of salary and creditworthiness). In the meantime, I also got a reference letter from my overseas bank. Am looking for a better bank account now, either Santander (b/c of the 123 account) or Barclay's.

Best,
blon

zerog

blon wrote: »

Further to my previous post above, I just wanted to share the good news that Capital One revised their decision in my favour. I had sent an appeal including supporting documentation (payslip, foreign CC statements giving evidence of salary and creditworthiness). In the meantime, I also got a reference letter from my overseas bank. Am looking for a better bank account now, either Santander (b/c of the 123 account) or Barclay's.

Best,
blon

Good for you, I couldn't get anything until I'd been in the UK for 3 years too, but HSBC UK opened an account with large overdraft and credit card for me before I came.

blon

zerog wrote: »

Good for you, I couldn't get anything until I'd been in the UK for 3 years too, but HSBC UK opened an account with large overdraft and credit card for me before I came.

Thanks for joining in, what you are reporting is intriguing.
Was it the HSBC passport account that you opened before coming to U.K.? And so you're saying that while you had that, it still did not help you in obtaining further credit in the U.K. because your credit history was too recent?

adindas

Thrugelmir wrote: »

What advantages?

fart wrote: »

Yes but why would someone fret about not having those things? Except for the cashback .

Both of you need to read more from this forum and see why the people prefer to pay by Credit Card if in fact they could pay it in cash.

Cash back is just one major advantage

Use the search words "stoozing" and you will understand why people prefer to pay by credit card even they could pay it in cash if they wanted to.

MPH80 has given you also other advantages
Cashback ... section 75 protection ... chargebacks ... Reward points

Just very simple to understand, interest free period of one month if you pay by credit cards. You could put your money temporarily somewhere else an earning interest.

If you get the right credit card. You could also get
Zero fee for transaction in foreign currency to be used abroad.
Zero percent on purchase for a duration of time, it could be 24 months. Imagine this as borrowing money a few grands without interest charge.

blon

I now have confirmation of my credit limit, a whopping GBP 200.... :T ... really makes you contemplate maxing out the card and leaving the country

At least it's the Capital One Classic Extra card with cashback, which according to their website is at least for people with an average to good credit history, so this is not their cheapest bad-credit product.

zerog

blon wrote: »

Thanks for joining in, what you are reporting is intriguing.
Was it the HSBC passport account that you opened before coming to U.K.? And so you're saying that while you had that, it still did not help you in obtaining further credit in the U.K. because your credit history was too recent?

No, it was the student account with 0% OD of £2000 and CC of £500

I did make the mistake of not repaying the OD on the last day of each month (so that it reports £0 used), but I didn't know to do that until 5 years after I first came.

After 3 years of address history I was able to get most credit cards and overdrafts that I asked for, while still a student (except for Halifax for some reaosn)