Credit Card Catch-22. Can I break it?

Taucher

What I mean is, I have a credit card with a limit of £3,500 and a balance of £1800(ish). The APR on this card is 33%.

Six months ago, I applied to a Sainsburys 0% balance transfer card which was recommended to me and I was told I had a 90% of being accepted by Experian. Needless to say I was one of the 10% and was refused. That application has now gone off my credit report and my report has recovered to pre-application level. I am utilising 40% of my (small) credit limits, everything indicates I would be a low risk candidate for credit (according to both Experian and Equifax. Noddle does not think I am quite such a good candidate for some reason).

But I dont want to apply again, be refused and then it ruins my credit report for another 6 months. I will likely be applying for a mortgage in 6 months or so!

Any way around this? Any tips or advice?

Thanks!

ilikewatch

I wouldn't have thought that being declined for one credit card would "ruin your credit report" for 6 months - 2 or 3 in quick succession would probably make you less attractive to some lenders though. I thought that applications stayed on your file for 12 months though?

Candyapple

What other cards do you hold? What are their limits and how much do you owe on them?

Are you on the electoral roll?

Annual salary?

Is everything on your credit files in order? Any financial associations etc?

eskbanker

Taucher wrote: »

I will likely be applying for a mortgage in 6 months or so

Assuming you're going to have access to some form of equity/deposit for a property purchase, can you defer your plans to buy until after you've paid off your CC debt(s)?

Taucher

Thanks for your replies.

I wouldn't have thought that being declined for one credit card would "ruin your credit report" for 6 months - 2 or 3 in quick succession would probably make you less attractive to some lenders though. I thought that applications stayed on your file for 12 months though?

Well the credit application didn't ruin my report (bit melodramatic there, sorry) but it did bring the score down and changed the tone of the writing regarding how I would be seen by lenders. Not sure how long applications are meant to stay on file but this came off after 6 months.

Assuming you're going to have access to some form of equity/deposit for a property purchase, can you defer your plans to buy until after you've paid off your CC debt(s)?

My plan is to pay off debts at around £400 per month. This should get rid of nearly all debts in 6 months (will have about £300 left). I don't really want to defer as my baby (first) is due early September and we currently rent a one bed flat.

What other cards do you hold? What are their limits and how much do you owe on them?

Are you on the electoral roll?

Annual salary?

Is everything on your credit files in order? Any financial associations etc?

I have one other credit card with an APR of 14%. The credit limit on that is £2,650 and I have about £850 on there. However, the account is closed. I am on the electoral roll (always have been) but have moved house ALOT - been in current place for 1.5 years. My annual salary is £24,300. Apart from the £2,600 on two credit cards, I have no other debts. Any lenders more likely to accept me for a credit card?

I am trying to do the right thing by getting a better rate.

Thanks for your replies everyone.

eskbanker

Taucher wrote: »

My plan is to pay off debts at around £400 per month. This should get rid of nearly all debts in 6 months (will have about £300 left). I don't really want to defer as my baby (first) is due early September and we currently rent a one bed flat.

Planning to pay off debts by the new year is a good idea but my point was that if you're looking to get a mortgage around the same time then you'll presumably have access to some funds for a deposit, assuming 100% mortgages aren't an option? Therefore, if you could use some of the deposit money now to pay off the debts (and save back up again) then you'd have a cleaner bill of financial health when mortgage time comes, even if this means a bit of a delay in buying?

ViolaLass

If you really have got a deposit saved, keeping it instead of paying the credit cards off now makes no sense.