How many times is too many to apply?

BinkadyBoo

Hi everyone,

I was wondering if anyone could offer any advice on how many times would be considered 'too many times' in terms of applying for a loan/credit card.?

I am in a situation where over the course of the last couple of years I have accrued about £6,000 in debt on my credit card that I am eager to be rid of. In my investigations of ways to do this I decided to get a personal loan from Admiral, to pay off over 3 years,which seemed like a good idea (aiming for the 3.3%). When I applied I was denied (despite it being listed as 90% approval change on the comparison site). This was about 2 weeks ago.

Last night I decided to try my luck and go for a Halifax Credit card to utilise the 0% 18/36 month period and do a balance transfer, and this was declined.

I have signed up for the credit club, and it lists my credit rating as fair (767) however my affordability is 'v.weak'.

So my situation is one whereby I am quite eager to find a way to not have to pay this interest on my debt every month which is close to £100, but I am apprehensive about applying anymore cause of what it may do to my credit.

The credit club lists some other personal loans and 0% CC's in the 60% - 80% acceptance chances range, and in an ideal world I'd just work through them and see which one would accept me, but I am not sure if I should or not.

Does anyone have any advice on how I should proceed. Is 2 checks in the span of 2 weeks, nothing to be concerned about, or should I wait a while before trying again, and pay the interest on my debt for a few more months?

Thanks for any advise or input any of you find people could offer

Arleen

We have a great advice for anyone who wants to consolidate here - don't. Instead, cut your spendings, pick up extra hours, overpay the debt.

BinkadyBoo

I'm not really consolidating or anything, as its just a single debt on a single credit card.

I am planning to get it paid off, and looking into ways to get more money and reduce spending, etc,

But isn't it better to in the meantime, get this debt onto as low an interest as possible?

Thrugelmir

BinkadyBoo wrote: »

But isn't it better to in the meantime, get this debt onto as low an interest as possible?

You'll help yourself more by being seen to be proactive. Lenders will assess you on your 72 months of history. Reductions in the debt owed will be a good indicator to a lender that you are making an effort yourself. Not simply looking for an easy way out. By reducing the debt owed you'll also improve affordability factors.

YorkshireBoy

BinkadyBoo wrote: »

I have signed up for the credit club, and it lists my credit rating as fair (767) however my affordability is 'v.weak'.

What that says is they don't think that you can't afford to service additional debt, but they acknowledge you've done OK with the debt you've already got.

You need to understand why you're being declined, and so do we to offer any advice. I wouldn't apply anywhere else until you've actioned the following:

What do your credit files show? Not the numbers, or descriptive words, but your level of debt, number of credit accounts, mortgage, financial associates, Electoral Roll status, etc?

There are 3 important ratios that lenders consider:

Used credit to available credit. Greater than 50% might be considered high.

Used credit to income. Greater than 25% might be considered too high if the loan then takes it to 50%.

Available credit to income. Greater than 50% could be an issue.

If you'd rather not disclose your income on here, just do the sums for the above and post back the figures for further advice.

Two additional questions:

Have you addressed the reason(s) for the £6K debt existing?
Are you currently paying more than the contractual minimum on the card?

PixelPound

If you have made two applications in two weeks, whether successful or not then that will have an impact on future applications in the short term at least, too many applications deem you desperate for credit and a higher risk. You need to delve into your credit report as has been stated since there looks to be something on there affecting the applications.

Thrugelmir

The BOE reviewed 0% balance transfers in the summer. Lenders are now responding to the concerns raised. Not least that the term in months being offered are becoming shorter. While the number of "offers" and appetite for new business are being reduced.

BinkadyBoo

What that says is they don't think that you can't afford to service additional debt, but they acknowledge you've done OK with the debt you've already got.

You need to understand why you're being declined, and so do we to offer any advice. I wouldn't apply anywhere else until you've actioned the following:

What do your credit files show? Not the numbers, or descriptive words, but your level of debt, number of credit accounts, mortgage, financial associates, Electoral Roll status, etc?

There are 3 important ratios that lenders consider:

Used credit to available credit. Greater than 50% might be considered high.

Used credit to income. Greater than 25% might be considered too high if the loan then takes it to 50%.

Available credit to income. Greater than 50% could be an issue.

If you'd rather not disclose your income on here, just do the sums for the above and post back the figures for further advice.

Two additional questions:

Have you addressed the reason(s) for the £6K debt existing?
Are you currently paying more than the contractual minimum on the card?

Thanks for all your input, and the input from everyone else on here. A lot for me to consider, and generally speaking I think for now its best to not make any more applications immediately

In terms of what my credit records show: 10. Most of these being my phone, insurance, etc.

I also have noticed that I am not on the electoral register at the moment (as I've only lived here a month), which I still need to do (It shows me on it for the last 2 addresses I lived at though)

In terms of the 3 ratios you describe Mine are as follows from the Money club affordability page:

My debt ratio is showing as 'v.good' and a fully green circle
My credit Utilisation is 'fair', filling 3 of the 5 sections (so 60%ish)
My disposable income is listed as 'v.weak'

So of those 3 things, it is my disposable income which I think is holding me back the most, and which I think I need to address. Obviously though, I don't think thats something that you can do immediately, short of getting a new job. I am starting to look into some secondary income opportunities, but those are still in their infancy.

I'll happily tell you my income. My Salary comes out to about 34k for the year (pre tax). I am currently renting with my girlfriend, but she is a student so doesn't help out too much financially apart from some money from her student loan. The rent here is £750 a month.

In terms of your 2 additional questions

Have you addressed the reason(s) for the £6K debt existing? - This one is something I am addressing now. My debt wasn't too bad about half a year or so ago and usually was around 1-2k, but these last few months have had a lot of expenses crop up, including moving to a new place, and the associated costs with that, some car troubles, a small holiday to Cornwall and recently, some xmas related spending. It was my CC reaching over 6k that I really started to decided to address this issue seriously (as I only have a credit limit of £6,750). I have drawn up a budget, I am religiously tracking all spending, and I have been working through the 'money makeover' and investigating alternative income sources. So yes, I am aware of why it got this bad (purely my own fault) and I am very dedicated to fixing it (which is why I have been looking for a way to reduce the interest on it)

Are you currently paying more than the contractual minimum on the card? - I would usually pay about 500 off straight away after being paid, but found near the ed of the month, having to resort to using it. Back then I was not budgeting, and was just kind of going with the flow. These last few months have had a lot of expenses pop up though and so I have just paid the minimum (and then spending more than what I paid the previous month). As a result I am hoping to reverse this trend.

PixelPound

BinkadyBoo wrote: »

...
In terms of the 3 ratios you describe Mine are as follows from the Money club affordability page:

My debt ratio is showing as 'v.good' and a fully green circle
My credit Utilisation is 'fair', filling 3 of the 5 sections (so 60%ish)
My disposable income is listed as 'v.weak'

So of those 3 things, it is my disposable income which I think is holding me back the most, and which I think I need to address.

Have you gone into the full report (its a tab at the top and checked nothing wrong there?

Whilst you are aiming to get the loan to pay off the CC there is no guarantee so the affordability check on the application will be based on servicing both the loan and the CC

BinkadyBoo

Thing is, my credit card is with Nationwide, and when I tell them that the loan is to pay of the CC I have with them, they just offer it at 18.8%, which is pretty much the same rate as my CC interest, so there isnt much point.

I'm thinking at this point Ill just put my CC away somewhere and just focus all my efforts on getting it paid off

cjmillsnun

BinkadyBoo wrote: »

Thing is, my credit card is with Nationwide, and when I tell them that the loan is to pay of the CC I have with them, they just offer it at 18.8%, which is pretty much the same rate as my CC interest, so there isnt much point.

I'm thinking at this point Ill just put my CC away somewhere and just focus all my efforts on getting it paid off

I think that's a wise move.