"bad credit"

philrichardson5

Hi,

I've got a spotless (albeit, perhaps sparse) credit rating/history. I'm 26 and have never missed/delayed a payment for anything, ever (utilities/mobile phone/personal loan/mortgage) etc. I've only taken out one loan (for £7500) which was paid back over 24months on time every month and my mortgage is about 15months old (again, payments never missed)

My credit score on the main sites is "good" (930 on experian) yet when I do any sort of searches via experian or MSE I always get directed into the "bad credit" credit cards for people with past bankruptcies etc

I've recently looked in to getting a credit card for no reason other than to improve my credit rating further so I can get a better mortgage rate at remortgage and was declined by santander, presumably because I'm too safe and they know I'll never miss a payment so they'll never make any money from me(?). A lot of the advice on the forums is to do with shifting debt around credit cards, but I try to live my life debt free (my general rule was/is that if I can't afford it now, I'll wait, save the money, and buy it later, then pocket the interest I would have paid to put towards the next thing I'll want to buy), though I'm finding out that this is punished equally (arguably more) to if you live your life at your max credit limit 24/7.

Any tips? Should I just go for any credit card that will accept me, how long will it take for the "positives" to kick in (assuming I keep paying in full, every month, i.e. not making them any money)?

Regards,
Phil

[Deleted User]

Santander won't have declined you because they think they won't make any money from you - they'll have declined you because you are higher risk, due to a thin credit file.

Try your own bank, or someone like aqua, Vanquis or Cap One.

Use it regularly and pay in full each month.

InsideInsurance

Are Santander your main current account bank or a random/ benefit based choice?

Revolving credit, like credit cards, is considered higher risk than loans and much more risky than mortgages hence someone may be able to get a prime loan but be declined a prime credit card

dresdendave

The main thing that is bad with the "bad credit" cards is the very high APR.


Based on your post I would assume you intend to pay the card off in full every month, if so, then the APR is irrelevant.


Get one of these cards, use it as above and after six months or so you may well be able to obtain a "better" card if you wish to.

philrichardson5

thanks - i've been current account jumping (yearly, ish) to chase the best interest rates and recently (last month) switched to santander 123 current account so thought i'd apply for the credit card to match (for ease of seeing them both in the same online banking, if anything, plus they give cashback on tesco/fuel so it's better than nothing) - I guess I'll go with an extortionate APR/no benefit card for a year or so...

thanks for the responses
phil

20aday

philrichardson5 wrote: »

thanks - i've been current account jumping (yearly, ish) to chase the best interest rates and recently (last month) switched to santander 123 current account so thought i'd apply for the credit card to match (for ease of seeing them both in the same online banking, if anything, plus they give cashback on tesco/fuel so it's better than nothing) - I guess I'll go with an extortionate APR/no benefit card for a year or so...

thanks for the responses
phil

Give it six months and try again; I bank with Lloyds myself and applied for their current account in February of 2014. Tried for the Choice Rewards card and was 'declined.'

Waited until August of last year and was granted the card.

In the mean time use the high APR card (the interest won't matter when paying the statement in full) and it'll certainly help when you re-apply with Santander.

philrichardson5

Hello moneysavers,

Thought I would continue with my original thread - I took the advice given and got myself a credit card with Aqua, initially on a £1200 limit of which I spend about £50 (which consists of around 10-15 £5 ish transactions) per month on and pay off in full.

I have noticed that they are keen to keep pushing up my credit limit, after about 4 months I got a letter saying they were increasing it from £1200 to £2400, and this week I have just had another one saying they will increase it from £2400 to £3600. (If I do nothing it happens automatically, I have to actively ring an 0845 number to stop it...)

Originally I didn't think much of this but thinking again, on my credit report would this look (to a potential mortgage lender or other credit lender) like I need more credit and am continually running out of money every few months? or is it nothing to worry about?

Should I keep letting them push my limit up as much as possible or just tell them to leave it be?

Again - I don't need the credit I am only using a card to help improve my credit score/rating/history

Thanks for any help

[Deleted User]

Take it. It's still a very low limit and you don't need to use it.

onthefencepost

you could try Aqua as you more than likely will get accepted, use it and pay it off everymonth you'll soon get accepted for a main stream card. Try your bank as some banks do look at how your account is with them and scored accordingly.

fruitisbad

philrichardson5 wrote: »

Hello moneysavers,

Thought I would continue with my original thread - I took the advice given and got myself a credit card with Aqua, initially on a £1200 limit of which I spend about £50 (which consists of around 10-15 £5 ish transactions) per month on and pay off in full.

I have noticed that they are keen to keep pushing up my credit limit, after about 4 months I got a letter saying they were increasing it from £1200 to £2400, and this week I have just had another one saying they will increase it from £2400 to £3600. (If I do nothing it happens automatically, I have to actively ring an 0845 number to stop it...)

Originally I didn't think much of this but thinking again, on my credit report would this look (to a potential mortgage lender or other credit lender) like I need more credit and am continually running out of money every few months? or is it nothing to worry about?

Should I keep letting them push my limit up as much as possible or just tell them to leave it be?

Again - I don't need the credit I am only using a card to help improve my credit score/rating/history

Thanks for any help

Hi Phil,

The credit reference agencies don't just get your available credit, they get how much of it you are using, so simply having access to thousands of pounds isn't neccessarily a negative, having thousands of pounds worth of credit and using it might be but often they will look at a percentage utilisation of your available credit, so keep that low and it should be a positive.

The only real issue is if the amount of credit you have access to starts exceeding 50% (as a broad rule of thumb) of your annual salary, at that point you may struggle to get more credit.

Westminster

I didn't see you make any reference to Equifax or Call Credit.

Have you checked your CRA files with them as you may have some adverse data (which could include fraud) which does not appear on Experian.