Suddenly only getting rejections

baileywin

Cycrow wrote: »

as it sounds like you have at least £10k of unsecured credit, thats already close to 50% of your income, so could be a likely reason for rejection

I see your point.

Is it worth asking to drop the limit on cards I don't use?

My Equifax report came through today and all is ok there as well.

Cycrow

theres no real way of knowing if it'll help, but in theory, if you drop your limits, you will look better on affordability, so it could improve your chances.

of course this could also increase your credit utilisation, depending on how much debts you have

Thrugelmir

baileywin wrote: »

I understand your points re lots of credits accounts - but I used to have more cards, and never had a problem getting accepted whilst I was also earning less money - so it's surprising now I'm earning more with less cards it's a problem!

Times have/are changing. In general 4 lines of available credit are deemed sufficent. Credit card companies are looking into sharing of data i.e. whose stoozing. Like mortgage lenders are having to adapt to. Other credit providers will find themselves having to act more responsibly when granting credit. The change may be slow but it's in the background.

Mulder00

Different companies have different rules when it comes to what appetite they have to take on additional credit risk, so there isn't a one-size-fits-all rule stating that you can take up to a specific % of your salary in unsecured debt.

The things that jump out at me:

1. You are overdrawn to a similar level to your monthly salary, so if your bank had to come knocking on your door for their money, you'd be unable to pay it back and still manage your credit card debts.
2. Your credit card limits tally up to 50% of your annual salary. Personally, I would not be able to sleep if that was my situation.
3. You opened two current accounts within a space of 3 months and tried to open a second account with Nationwide within 2 months of opening another one. They now have more detail about your conduct of your finances, so the outcome may very well be different to when they didn't have this detail.
4. You don't mention how much of your credit limits you've utilised, this will also have a material impact on a decision to issue you with additional credit.
5. Unless your partner has default, little or no credit history is unlikely to have a negative effect on your own creditworthiness, based on what I see, your own state of affairs is mostly to blame!

That overdraft would really bother me as a potential lender - I would not give you credit if your entire monthly salary could be taken up to repay that overdraft.

Do you have any assets or savings? It appears, based on what I am reading here that you just have piles of debt (which is perfectly manageable to you) and nothing to back it up? If you were to lose your job tomorrow or the bank called for the overdraft to be repaid, would you be able to make ends meet without using up any credit? This is what lenders would want to know - they want to know that if the unexpected happens, you are still covered and from what I can see, it's not the case at all.

baileywin

Mulder00 wrote: »

Different companies have different rules when it comes to what appetite they have to take on additional credit risk, so there isn't a one-size-fits-all rule stating that you can take up to a specific % of your salary in unsecured debt.

The things that jump out at me:

1. You are overdrawn to a similar level to your monthly salary, so if your bank had to come knocking on your door for their money, you'd be unable to pay it back and still manage your credit card debts.
2. Your credit card limits tally up to 50% of your annual salary. Personally, I would not be able to sleep if that was my situation.
3. You opened two current accounts within a space of 3 months and tried to open a second account with Nationwide within 2 months of opening another one. They now have more detail about your conduct of your finances, so the outcome may very well be different to when they didn't have this detail.
4. You don't mention how much of your credit limits you've utilised, this will also have a material impact on a decision to issue you with additional credit.
5. Unless your partner has default, little or no credit history is unlikely to have a negative effect on your own creditworthiness, based on what I see, your own state of affairs is mostly to blame!

That overdraft would really bother me as a potential lender - I would not give you credit if your entire monthly salary could be taken up to repay that overdraft.

Do you have any assets or savings? It appears, based on what I am reading here that you just have piles of debt (which is perfectly manageable to you) and nothing to back it up? If you were to lose your job tomorrow or the bank called for the overdraft to be repaid, would you be able to make ends meet without using up any credit? This is what lenders would want to know - they want to know that if the unexpected happens, you are still covered and from what I can see, it's not the case at all.

I understand the point your going for (i.e. you've gone on the numbers alone like a CRA would), but...

Limits are high - but usage is low. I would like £2-3k availability on one card (i.e. the other day I had to spend £1000 "out of the blue" on a holiday and it's nice that I can do that and not have to split across 5 cards and the rest in cash), but I don't need it on several cards and maybe thats part of the problem. Again, all cards always paid off at the end of each month, but I try to put as much £ through them as possible to get cashback.

The overdraft is a "planned" overdraft, a throwback from a student account (0% interest, no fees, I have the money earning interest in a savings account). I had assumed that as it was a planned one it wouldn't affect me negatively - but I guess I might be wrong. However, I'll have to close it in Feb / March this year anyway so this will go soon.

Nationwide don't have any positive information on me to go on - the account isn't overdrawn, but I put in a balance, and every month I shuffle around £1,000 to keep the account open and take the 5% interest on top - so maybe I'm not the most profitable-looking customer.

I have some savings (~£6k + £2.5k (of which £1.5k is the overdraft from the other account)) but I don't believe CRA's can see balance (unless it's negative), I wouldn't describe myself as "in debt" (well, except my student loan) as I'm not paying any interest - but I can understand how the data might lead you to that conclusion.

Intersting post

Mulder00

A planned overdraft is still debt - it's better than an unplanned overdraft of course, but if you're overdrawn it won't ever count in your favour.

Can definitely see you know how to manage your money, but it could appear messy from a credit risk point of view and as you say, there are things that they just can't see. You may just be at a limit for now and should give it some time...

When you booked the holiday on the credit card, were you not charged any fees for using the card instead of a debit card? (Not sure if travel agents do that, but flights on the internet always attract nasty credit card surcharges - I usually pay for this directly from a debit card as the cashback/offers usually don't make up for the fees charged to use a credit card).

If I were in your position, this is what I would do:

1. Nothing. You seem to know what you're doing, but should maybe just maximise what you have for a while.
2. If I really wanted to open another account, the first thing I'd do is to get rid of the overdraft. Not the best thing, but I'd rather have this debt on a card, than on a current account if I wanted to stooze and still open more accounts.
3. Look at the cash back / offer of each credit card - if you were to combine two cards into one (e.g. one card with a higher limit), would you get more value? Keep the ones with the higher value offers and get rid of the ones which are not worthwhile - only keep the unique ones.
4. Look at what's left and reduce the credit limits to be about double that of the amount you put through them each month.

That's what I would do...personally if your cards etc leave you in a cash positive position compared to not having them, I'd just leave things where they are and wait for a while.

baileywin

Mulder00 wrote: »

When you booked the holiday on the credit card, were you not charged any fees for using the card instead of a debit card? (Not sure if travel agents do that, but flights on the internet always attract nasty credit card surcharges - I usually pay for this directly from a debit card as the cashback/offers usually don't make up for the fees charged to use a credit card).

The cashback largely covered the fee (~£7 left extra, 2% fee vs 1.25% cashback) but then I get Section 75 protection. Plus, the cards cashback tiers are additive so the more put through the card, the higher cashback I get for the year - hope it was worth it.

Mulder00 wrote: »

2. If I really wanted to open another account, the first thing I'd do is to get rid of the overdraft. Not the best thing, but I'd rather have this debt on a card, than on a current account if I wanted to stooze and still open more accounts.
4. Look at what's left and reduce the credit limits to be about double that of the amount you put through them each month

I think these are what I will have to do. I was sort of hoping to close the overdrawn account using a switching bank (i.e. First Direct) and get some cashback for doing it but it seems they don't want me!

baileywin

With the feedback in this thread, I've repaid the overdrawn student account, and arranged for the following credit limit decreases:

baileywin wrote: »

I currently have the following:
Credit Cards:
Amex Platinum Rewards (£3,000 limit),
Aqua (£750 limit, will be closed at the end of the month),
Luma (£1,500 limit),
Barclaycard Freedo Rewards (2,500 limit).

Amex - £2,000
Aqua - Closing on the 22nd
Luma - £400
Barclaycard - £1,000

Lets see how it goes

CherlokHomes

baileywin wrote: »

With the feedback in this thread, I've repaid the overdrawn student account, and arranged for the following credit limit decreases:

Amex - £2,000
Aqua - Closing on the 22nd
Luma - £400
Barclaycard - £1,000

Lets see how it goes

Why on earth have you decreased your credit limits?

matttye

You've applied for three bank accounts and two cards recently. Whether you are or not, to the lender you must look pretty desperate for credit.

Don't apply for anything else for about 6 months.