Rejected for Card - Why and Suggestions?

tiredofpoorservice

I'm sorry if this topic has been flogged to death but I hope that someone can answer me easily.

Last year, as a result of this board, I decided to do some stoozing. It's all gone very successfully and I have now got quite a few credit cards, all maxed out, all being paid the minimum amount by DD. The money to pay these is all stashed away in 3 or 4% accounts so it's not going to earn me millions but probably an easy few hundred pounds per year.

Last week I tried to open a new account (Post Office online through topcashback) and I was rejected. This has never happened before so I signed up to Experian (free trial through topcashback) and got my credit rating. It was excellent, 489, well above UK average and the wording was along the lines of, "You have an excellent credit score. You are a low risk and are very likely to be given credit by any financial institution". Looking through the report it was all "Very good"s except for one criterion which was just "Good".

Obviously I now have a large number of cards and accounts and this shows up in the report. Do the companies use this to say, "He's a stoozer - don't give him an account?". Is there anything that can be done about this? Are current accounts without O/D facilities better, in this regard, than ones with?

Any suggestions? As I say, I apologise if this one has been done to death.


Thanks in advance.


TOPS

Rosco32

Hi Tops,


For starters I would ignore the credit scores, as they are useless and are not seen by lenders. If you have no defaults or missed/late payments I would suspect that the maxed out cards are going against you as a high balance to limit ratio with just minimum payments made could make you look overstretched.

Rosco32

Btw if you have the money to pay them off why not either pay in full or pay off just more than 50% of the outstanding balance as that should help things.

tiredofpoorservice

Thanks for your replies, Rosco.

Should have said, no missing payments or anything. A couple of months ago a direct debit instruction didn't get through in time so I was a couple of days late (should have watched more carefully - darn. But you would have thought more than 3 weeks would have been long enough). But they said that 2 days late on less than £500 should have no effect.

I think there is no point in paying off on carefully stoozed money! Surely this would just be robbing Peter to pay Paul.

Why do you say that lenders do not see the credit score? I really have no idea how this works!


TOPS

tiredofpoorservice

Or, rather, paying Peter to rob Paul!

Rosco32

No worries. Were you stung for that missed DD on your credit record? Those scores are what the CRA'S make up based on the data within your credit file. Its supposed to be some form of statistical analysis designed to help you understand your credit worthiness. Lenders don't see these scores they look at this like credit account repayment history, electoral etc and then produce their own score.

Thrugelmir

How many cards do you currently hold?

Tixy

Many people who are stoozing get to to a point where they max out their ability to stooze.

How much do you currently have on credit cards in total? How does that compare to your income? The new potential lender has no idea that you have the money saved so will be considering if they think you can afford to service all your existing debt and a new debt to them on top.
If your debts are high compared to your salary and if you are only paying minimum payments then they will consider it high risk to lend any more to you.

One thing that is often recommended to stoozers is that they pay just over the minimum payment each month (even if its just a few quid more) so that you are not perceived as struggling with the level of debt you have. That doesn't change the overall affordability issue though.

tiredofpoorservice

I have no bad months on my credit record - they are all green.

At present I have a fairly scary £30,000 on credit cards but I am VERY responsible and this money is simply NOT being touched - I don't view it as mine. As I said, it's all stashed away and earning 3-4% (but by the time you pay tax & BT fees, etc, the actual profit is more like 1-1.5%). This is quite a hefty proportion of my salary. Well, OK, it's almost all of it.

I presently have about 10 credit cards. I'm about to reduce this number by 1 (Aqua) and M&S is coming to an end soon. I am presently stoozing on 6 and also have Aqua (for cashback), Tesco (for points) and Santander (for train & petrol cashback).

Does the slight overpayment thing really work? If so that's something I would definitely do, assuming that they can set up a DD for a fixed amount per month. Is this an option? (Most of the time it's either full payment or minimum payment, isn't it?).


TOPS

Rosco32

Some banks now report more to the CRA's than others, including a flag as to whether the payment you make every month is the minimum. It's represented as a Y or an N so if you pay even £1 more than the minimum you will appear to be paying more.

Tixy

Given the high level of debt compared to your income then it is not surprising you are struggling to get accepted elsewhere.

The slight overpayment can be useful, but I doubt it would change things much in your situation.

Some card providers will allow a DD for a set amount (or minimum if higher), others won't.