credit card refusal

sheshegabore

I applied for a Saga platinum card because I wanted to use it abroad. The request was refused on the basis of some information given on my credit rating. I contacted the company, Equifax who for a fee looked into my credit rating. It was 474 which they said was excellent and to go back to Saga and find out why I had been refused.

This I did, and to my astonishment they said it was refused because I already had applied for too much credit. This included their inclusion of overdraft facilities and two banks (which I have never used but was given without requesting it) and three credit cards (which I never use and the activity on the credit scoring site confirms this. It also includes my gas and electric provider EON because I pay direct debit, which is interpreted as credit.

I also confirmed that my annual income was above the required £12,000 and that I own my house outright.

Can someone tell me how on earth this happens? The lady at Saga says it is their policy not to give credit cards to someone with too many credit agreements,(even though I am not using any of them and haven't for years).

The worrying point for me, is that the letter of refusal also states that if I have any other insurance cover with them it will be invalid. Both my husband's and I's car insurance is with them and they never questioned me then.

Can someone help me to sort this out, thanks?

Caz3121

sheshegabore wrote: »

The lady at Saga says it is their policy not to give credit cards to someone with too many credit agreements,(even though I am not using any of them and haven't for years).

The worrying point for me, is that the letter of refusal also states that if I have any other insurance cover with them it will be invalid. Both my husband's and I's car insurance is with them and they never questioned me then.

they must believe that your available credit (even not currently used) gives an element of risk...how much available do you have if you were to max out the three credit cards and the overdraft...could you not close unused cards or ask to have the limits reduced...lenders are allowed to have whatever lending criteria they wish...there are other lenders

re the insurance, I think only Saga can clarify the situation there, it does sound strange

gjchester

sheshegabore wrote: »

I applied for a Saga platinum card because I wanted to use it abroad. The request was refused on the basis of some information given on my credit rating. I contacted the company, Equifax who for a fee looked into my credit rating. It was 474 which they said was excellent and to go back to Saga and find out why I had been refused.

There is no such thing as a universal numerical credit rating, the credit agencies supply your history to the requester who scores them themselves. Equifax's number will not be used to work out if you get a card.
The only use is a comparator, so if your trying to improve your rating, its a measure of if you are or are not getting better, but don't pay for any ongoing score reports, they are meaningless outside the credit provider.

sheshegabore wrote: »

Can someone tell me how on earth this happens? The lady at Saga says it is their policy not to give credit cards to someone with too many credit agreements,(even though I am not using any of them and haven't for years).

You've answered your question. You may not be using the credit you have access to but if you used all cards and overdraft's how far in debt would you be? If any lender thinks it would be irresponsible to lend to you they can't be forced to do so.

sheshegabore wrote: »

The worrying point for me, is that the letter of refusal also states that if I have any other insurance cover with them it will be invalid. Both my husband's and I's car insurance is with them and they never questioned me then.

Can someone help me to sort this out, thanks?

No idea on this, sound like its wrong you were not applying for insurance, but only Saga can confirm what they mean.

exoteric

sheshegabore wrote: »

This I did, and to my astonishment they said it was refused because I already had applied for too much credit. This included their inclusion of overdraft facilities and two banks (which I have never used but was given without requesting it) and three credit cards (which I never use and the activity on the credit scoring site confirms this. It also includes my gas and electric provider EON because I pay direct debit, which is interpreted as credit.

What are the credit limits of the three cards and the overdraft/s? It's likely that you've already got a lot of credit "available", even if you aren't using it. The concern will be that one day you could simply max out all of your credit and then will have to default, so they aren't prepared to give you even more credit. The best thing to do may be to close cards which you don't still use to reduce your available credit, although it will take some months for your credit record to update.

AndyBSG

If you already have 3 CC's, the fact you don't use them is irrelevant.

If for example those three CC's each have a £5,000 limit and you're annual income is only £12,000 they will look at that and think "this person has more credit than they actually earn in a year so credit to income ratio is very risky"

You could close your three unused credit cards and apply again but there's not guarantee it would be accepted(you could then fail for example because you've made multiple applications for credit which may indicate you have liquidity problems)

sheshegabore

Thanks for all of the replies. It is really useful to see it from another view.

Never happened before, so will just not give my custom to SAGA!

Thanks again:beer:

eddddy

sheshegabore wrote: »

The worrying point for me, is that the letter of refusal also states that if I have any other insurance cover with them it will be invalid. Both my husband's and I's car insurance is with them and they never questioned me then.

Hi sheshegabore

I suspect that this refers to insurance products related to the credit card. From Saga's T&Cs:

We may, from time to time, make available to you insurance products and protection plans to cover losses and risks to you in connection with the use of your Card.

So if you applied for any of those during the application procedure, they are now cancelled (which is probably obvious!).

bsms1147

sheshegabore wrote: »

Thanks for all of the replies. It is really useful to see it from another view.

Never happened before, so will just not give my custom to SAGA!

Thanks again:beer:

You might come across this problem again though each and every time you apply from credit, with companies that aren't Saga. If you're not using them then you should at least consider closing down unused credit cards and overdrafts.