My credit is not bad enough for sub prime lenders

ForeverAwake

Just an observation about my credit card applications..

Accepted: Halifax purchase, Barclaycard platinum, Tesco, Argos & New Look store cards, Amex

Declined: Capital One, Aqua, Vanquis

I'm not complaining! Just suprised. I do believe these sub prime lenders are actually looking for customers with previous defaults to which I've never missed a payment.

Btw I had no searches when I applied for the sub prime cards also

[Deleted User]

My condolences.

CakeCrusader

If I remember correctly, Argos is issued by... Vanquis. Sorry about this.

Chappaz

ForeverAwake wrote: »

Just an observation about my credit card applications..

Accepted: Halifax purchase, Barclaycard platinum, Tesco, Argos & New Look store cards, Amex

Declined: Capital One, Aqua, Vanquis

I'm not complaining! Just suprised. I do believe these sub prime lenders are actually looking for customers with previous defaults to which I've never missed a payment.

Btw I had no searches when I applied for the sub prime cards also

This is the perfect example of how those universal credit agency scores can be so inaccurate.

Internal scoring systems for lenders are not just about risk. They're also about assessing customer profiles to see whether people would be a good "fit" for their products.

I suspect they probably do try to seek out those with poor credit histories. Why they'd reject someone with good credit is hard to say, but I'm sure there's method in the madness.

[Deleted User]

Chappaz wrote: »

Why they'd reject someone with good credit is hard to say, but I'm sure there's method in the madness.

It's because the limits are so low, so someone who clears in full (which would be the assumption around someone with a prime credit history) barely covers the cost of issuing the card and statements.

The merchant fee is enough for companies with higher spend on the cards, but not on the sub prime cards.

ForeverAwake

If I remember correctly, Argos is issued by... Vanquis. Sorry about this.

No, it's the Argos store card issued by Home Retial Group, not the visa credit card issued by Vanquis Bank.

CakeCrusader

Chappaz wrote: »

This is the perfect example of how those universal credit agency scores can be so inaccurate.

Internal scoring systems for lenders are not just about risk. They're also about assessing customer profiles to see whether people would be a good "fit" for their products.

I suspect they probably do try to seek out those with poor credit histories. Why they'd reject someone with good credit is hard to say, but I'm sure there's method in the madness.

It's impossible to know without inside knowledge. I have a Vanquis card, a Barclaycard and a Tesco card. I also have 2 CCJ's (thanks to my water company) which fall off next year and the year after, and 2 late payments to 02 from 2014 (up to a month late). My credit rating is 'very poor' even though everything else is up to date, I'm on the electoral roll and I work full time. It's been 'very poor' since I started checking my credit file last year, and the number has barely moved. Despite it being 'very poor', I was still able to get a 1.8k Tesco balance transfer card (bye bye, Vanquis!). They all have their own criteria and no one knows what this is

Chappaz

Deleted_User wrote: »

It's because the limits are so low, so someone who clears in full (which would be the assumption around someone with a prime credit history) barely covers the cost of issuing the card and statements.

The merchant fee is enough for companies with higher spend on the cards, but not on the sub prime cards.

You're probably right.

The thing is though, I'm sure these credit builder cards would have seen a huge surge in popularity, particularly with Martin Lewis always talking about using them and paying them off in full.

Not sure if these particular credit card companies like him or loathe him for that. I guess they just have to hope that, despite the advice, people still use them and carry balances over to make some profit on interest.

ForeverAwake

Internal scoring systems for lenders are not just about risk. They're also about assessing customer profiles to see whether people would be a good "fit" for their products.

I suspect they probably do try to seek out those with poor credit histories. Why they'd reject someone with good credit is hard to say, but I'm sure there's method in the madness.

I'm someone who will pay the card in full, not occur any charges or fees and spend in moderation. Basically not profitable for companies who's market is the higher risk category.

CakeCrusader

Chappaz wrote: »

You're probably right.

The thing is though, I'm sure these credit builder cards would have seen a huge surge in popularity, particularly with Martin Lewis always talking about using them and paying them off in full.

Not sure if these particular credit card companies like him or loathe him for that. I guess they just have to hope that, despite the advice, people still use them and carry balances over to make some profit on interest.

I don't think they like it when people pay in full at the end of the month, they are not in the business to improve credit ratings, they want to make money.

Ben8282

Yes. Applying for a credit card is a bit like applying for a job. You can be rejected for being over qualified.
I can't help wondering why you applied for the sub-prime cards after obtaining the others though.