Why am I being eligible only for bad credit CCs?

Cheeseburgler

I have no missed payments, no defaults, no CCJs. I currently hold two American Express cards. One has a limit of £700 decreased by me from £1000 and about 250 on it used; the other one a limit of £1000 and 800 used (interest at 0% for purchases at the moment). I also have a Barclaycard with a limit of £1060 and around 800 used. I have a couple of catalogues. One limit decreased by me to £150 with nothing on it and another one with a BNPL of £250 with a limit decreased by me to £300.

I have a history of settled accounts with no missed payments. Stable address for the last 4 years. Employed with a salary of £15600. I am on the electoral roll. Partner earns 31K and we live together so joint income is decent. I pay no rent and have no dependants.

Partner has a CCJ dated August 2010 and was able to get a MBNA card with a long free interest balance transfer period with that and a Virgin CC with similar characteristics. Not kidding. Was surprised myself. Applied for both a couple of weeks ago. He had also been approved for finance a couple of years ago with a CCJ. I have no adverse credit history and yet I can't get anything more than an Aqua card at the moment it would seem.

Why am I not eligible for any decent CC? That's what the Moneysavingexpert eligibility checker tells me. I have like 5 searches for credit applications on Equifax in the last 6 months. Could be that? It always gave me the same results though even prior to the failed applications.

I want a balance transfer card but can't get one it seems.

mwarby

I'm not sure that decreasing limits on accounts is a very good idea. It could look like your limits were reduced due to financial problems or poor running of the account

I'm not sure but for none joint credit cards, they'll only be looking at your salary. It may well be that many providers will see £3k of limits with £15k of income as being too risky(many people with that income would have little disposable income)

Cheeseburgler

mwarby wrote: »

I'm not sure that decreasing limits on accounts is a very good idea. It could look like your limits were reduced due to financial problems or poor running of the account

I'm not sure but for none joint credit cards, they'll only be looking at your salary. It may well be that many providers will see £3k of limits with £15k of income as being too risky(many people with that income would have little disposable income)

I decreased them to reduce my credit availability thinking it would improve my chances . Also, would never use all that credit on the catalogues. I always avoid paying just the minimum payment so I don't give the impression I am struggling.

I can see that point but I don't have really outgoings apart from the payments I have to make towards the debts I have. No rent share to pay, no shopping, no bills as they're all kindly paid by my partner.

I was able to get better stuff with less than half the income and less credit history!

Anyway I am concentrated on reducing my current level of debt. I don't know which one I should get rid of first.

The Barclaycard has part of the balance at around 9% interest and the majority of it at 0% now for a few months still. One of the Amex cards has no promotional rate on it so I'm paying interest. I also have the BNPL to think of. I'd leave the other Amex for now as it still has 0% for a good year or so.

[Deleted User]

Your high utilisation is likely to be the main issue.

Stop reducing the limits and pay down some of the debt. Options may then open up.

Marcio45

Having an account with a high credit limit shows that banks trust you, as you build credit history. As you have many accounts with very small limits it actually does not look good, specially when the limits have been reduced.
Remember other banks dont know if it was you that requested the reduced limits. You better cancel the cards/accounts you dont want to use and focus on a few but with decent limits. Look at barclaycard first, they are normally good at increasing limits, and they often come up with new BT offers.

Cheeseburgler

Marcio45 wrote: »

Having an account with a high credit limit shows that banks trust you, as you build credit history. As you have many accounts with very small limits it actually does not look good, specially when the limits have been reduced.
Remember other banks dont know if it was you that requested the reduced limits. You better cancel the cards/accounts you dont want to use and focus on a few but with decent limits. Look at barclaycard first, they are normally good at increasing limits, and they often come up with new BT offers.

I don't have high limits because when I applied for them I had like a 5K annual income.

The limits were reduced last month, but the fact I can only seem to be eligible for subprime cards has been happening for a few months.

This year I have applied for an O2 contract, cancelled the airtime and paid off the device plan in full so account settled and switched my third bank account for the switch incentive. I also have opened a Very account.

I also have opened a BT broadband contract, so they credit checked me because it's on my credit file.

I think maybe I need to get down to less than 50% of my available credit utilisation to see an improvement.

I already have a Barclaycard and have requested a limit increase now. They have declined me for an automatic increase so I wrote to them. We'll see. They won't give me a second Barclaycard if I already have one as you can only have one Barclaycard.

At the moment I only have 3 credit cards and all 3 have a balance. I closed the one I wasn't using, the M&S one I had with a 500 pounds limit.

I am just surprised that my partner can get good cards with decent limits with a CCJ still on his file (it's been settled for a while by the way but not reported as settled on his credit file) and I can't despite the fact my last 4 years of financial commitments show that my repayment conduct is excellent. I started having a credit history about 4 years ago and I have always wanted to have no marks on my file.

Nasqueron

The fact your cards are all carrying limits indicates at first glance to a computer that you are struggling to pay off your debts - 3 credit cards and 2 catalogues, 4 of them carrying debt and high utilisation with recent changes on your account and you want a 4th card smacks to a non-human decision maker that you are living beyond your means and trying to get as much credit as possible.

Pay them off and do more than the minimum payment on the 0% card, leave it a 6 months and then try again. Do you need another card? If you do, what's wrong with an Aqua if you get a BT 0% deal and it helps clear your debt?

Cheeseburgler

Nasqueron wrote: »

The fact your cards are all carrying limits indicates at first glance to a computer that you are struggling to pay off your debts - 3 credit cards and 2 catalogues, 4 of them carrying debt and high utilisation with recent changes on your account and you want a 4th card smacks to a non-human decision maker that you are living beyond your means and trying to get as much credit as possible.

Pay them off and do more than the minimum payment on the 0% card, leave it a 6 months and then try again. Do you need another card? If you do, what's wrong with an Aqua if you get a BT 0% deal and it helps clear your debt?

Nothing wrong with it if they offered one with a BT 0%. They only offer 4 months on purchases at 0% or thereabouts and I don't need that. I need a BT card with a long 0%, fee or not is not important. All these bad credit cards don't offer balance transfers at the moment. CapitalOne did one but it was like only 6 months. I think that offer is not available now.

I am not trying to make more debt otherwise I'd apply for a 0% on purchases card. I'd take the Aqua card with their 0% on purchases offer if I wanted that.
I know lenders can't know if I am gonna do a BT or just run up more debt so fair enough but so far I have shown I make all my payments on time and paid off some debts.
I need a BT card to shift my balance on the Barclaycard so I can close it.

I know I have to reduce my level of debt to have better chances but still a bit amazed at the fact that looking at the eligibility checker I come off as someone with bad credit.

Nasqueron

You have balances running on 3 cards and balance on a catalogue account, to the computer you ARE someone with bad credit as you're in debt and can't clear it. You'd be paying them off in full each month with enough income - rather than paying interest on the non-0% ones (this is the thing with automated assessments, they don't judge like a human could).

Pay more than the minimum on the BT cards and snowball the debts and leave it at least 3 months or if your partner is willing to take the debt on, do a BT from your cards to his and pay him

Anthorn

Cheeseburgler wrote: »

I have no missed payments, no defaults, no CCJs. I currently hold two American Express cards. One has a limit of £700 decreased by me from £1000 and about 250 on it used; the other one a limit of £1000 and 800 used (interest at 0% for purchases at the moment). I also have a Barclaycard with a limit of £1060 and around 800 used. I have a couple of catalogues. One limit decreased by me to £150 with nothing on it and another one with a BNPL of £250 with a limit decreased by me to £300.

I have a history of settled accounts with no missed payments. Stable address for the last 4 years. Employed with a salary of £15600. I am on the electoral roll. Partner earns 31K and we live together so joint income is decent. I pay no rent and have no dependants.

Partner has a CCJ dated August 2010 and was able to get a MBNA card with a long free interest balance transfer period with that and a Virgin CC with similar characteristics. Not kidding. Was surprised myself. Applied for both a couple of weeks ago. He had also been approved for finance a couple of years ago with a CCJ. I have no adverse credit history and yet I can't get anything more than an Aqua card at the moment it would seem.

Why am I not eligible for any decent CC? That's what the Moneysavingexpert eligibility checker tells me. I have like 5 searches for credit applications on Equifax in the last 6 months. Could be that? It always gave me the same results though even prior to the failed applications.

I want a balance transfer card but can't get one it seems.

It's a catch 22 situation. On the one hand you may have maxed your available credit so you reduce your limits but then your reduced limits tell lenders that the limits were reduced because it was judged that you are a worse risk than before.

It looks to me like you already have decent credit cards but that depends on how "decent" is defined.

Usually we don't reduce available credit and then apply for more credit. Lenders will think doing that is very suspicious and mark you out as a bad risk.

The solution is time: Keep up the payments and reduce your credit utilisation and don't reduce any more limits. Every month that passes will show you as being more and more reliable.

Cheeseburgler

Nasqueron wrote: »

You have balances running on 3 cards and balance on a catalogue account, to the computer you ARE someone with bad credit as you're in debt and can't clear it. You'd be paying them off in full each month with enough income - rather than paying interest on the non-0% ones (this is the thing with automated assessments, they don't judge like a human could).

Pay more than the minimum on the BT cards and snowball the debts and leave it at least 3 months or if your partner is willing to take the debt on, do a BT from your cards to his and pay him

I already do pay more than the minimum payment. I'd rather not involve my partner in my debts and put them in his name. It's better like that.

I thought bad credit was having defaults or worse, otherwise everyone who has a balance on their cards that is not fully cleared every month has bad credit automatically then going by that logic.