Credit score not important, then why am I being rejected?

RamZ

Hi all, I was wondering if someone could kindly help me with my situation.

A little background -

I've had 3 credit cards over the last few years (Halifax and x2 Barclays) with debt of around 10K combined. My score was sitting around the excellent mark until the last 2 months and has now dropped to "Poor" that's with Equifax and Experian.

The only thing that changed in the last 2 months was a closure of a small credit card account with a limit of £500 (Lloyds) and applied for 2 new cards with Virgin and M&S for a better balance transfer deal with the intention of transferring balance from my Barclays accounts.

Recently applied for a mortgage via a broker and was denied twice, this isn't showing as a hard search but rather a soft search on my file.

I was hoping someone could shed some light to why my score has dropped so much, I only have 1 default dated back in 2013 for credit card with a balance of £250 which has been fully settled.

There seems to be a difference of opinions where some say score matters and others say score doesn't mean anything. If thats the case then why have I been rejected twice? I have been on time with all my credit card payments, intact have been over paying.

Just to add my current credit card utilisation rate is sitting at approx 44%, I was also not registered on the electoral roll but since have applied to be on the local government records. Also there is 1 late payment marked from Very for an amount of £3.99 which at my fault I missed assuming it was part of the buy now pay later offer.

My wife has been gifted with funds to cover our deposit and we were hoping to buy a property by the end of the year.

Any advise would be much appreciated.

Hasbeen

RamZ wrote: »

Hi all, I was wondering if someone could kindly help me with my situation.

A little background -

I've had 3 credit cards over the last few years (Halifax and x2 Barclays) with debt of around 10K combined. My score was sitting around the excellent mark until the last 2 months and has now dropped to "Poor" that's with Equifax and Experian.

The only thing that changed in the last 2 months was a closure of a small credit card account with a limit of £500 (Lloyds) and applied for 2 new cards with Virgin and M&S for a better balance transfer deal with the intention of transferring balance from my Barclays accounts.

Recently applied for a mortgage via a broker and was denied twice, this isn't showing as a hard search but rather a soft search on my file.

I was hoping someone could shed some light to why my score has dropped so much, I only have 1 default dated back in 2013 for credit card with a balance of £250 which has been fully settled.

There seems to be a difference of opinions where some say score matters and others say score doesn't mean anything. If thats the case then why have I been rejected twice? I have been on time with all my credit card payments, intact have been over paying.

Just to add my current credit card utilisation rate is sitting at approx 44%, I was also not registered on the electoral roll but since have applied to be on the local government records. Also there is 1 late payment marked from Very for an amount of £3.99 which at my fault I missed assuming it was part of the buy now pay later offer.

My wife has been gifted with funds to cover our deposit and we were hoping to buy a property by the end of the year.

Any advise would be much appreciated.

Credit score does not matter.


Your credit report does, with no record at time of you electoral roll, £10000 in debt, applying for more credit cards? Late payment etc, might have something to do with rejection??

meer53

RamZ wrote: »

Hi all, I was wondering if someone could kindly help me with my situation.

A little background -

I've had 3 credit cards over the last few years (Halifax and x2 Barclays) with debt of around 10K combined. My score was sitting around the excellent mark until the last 2 months and has now dropped to "Poor" that's with Equifax and Experian.

The only thing that changed in the last 2 months was a closure of a small credit card account with a limit of £500 (Lloyds) and applied for 2 new cards with Virgin and M&S for a better balance transfer deal with the intention of transferring balance from my Barclays accounts.

Recently applied for a mortgage via a broker and was denied twice, this isn't showing as a hard search but rather a soft search on my file.

I was hoping someone could shed some light to why my score has dropped so much, I only have 1 default dated back in 2013 for credit card with a balance of £250 which has been fully settled.

There seems to be a difference of opinions where some say score matters and others say score doesn't mean anything. If thats the case then why have I been rejected twice? I have been on time with all my credit card payments, intact have been over paying.

Just to add my current credit card utilisation rate is sitting at approx 44%, I was also not registered on the electoral roll but since have applied to be on the local government records. Also there is 1 late payment marked from Very for an amount of £3.99 which at my fault I missed assuming it was part of the buy now pay later offer.

My wife has been gifted with funds to cover our deposit and we were hoping to buy a property by the end of the year.


Any advise would be much appreciated.

See the above in bold.

[Deleted User]

There's a lot of issues on your files - debt, missed payment, default, ER, high utilisation.

With a patchy file, use a decent broker who specialises in adverse. It sounds as if your current one is just hanging out applications.

[Deleted User]

The score doesn’t matter.

All those things you mentioned are things that the scores don’t like and will therefore decrease it.

But lenders do not see or use the score so you can safely ignore it

AnotherJoe

RamZ wrote: »

There seems to be a difference of opinions where some say score matters and others say score doesn't mean anything. If thats the case then why have I been rejected twice? .

Because they aren't using the score to reject you (they can't even see it) they are using the same factors that have lead to your low score, eg missed payment, not in electoral roll, large debts on cc.

PRAISETHESUN

As you've mentioned, the score you are provided with by the CRAs is not important as each lender calculates their own internal score when you make an application based on the contents of your file - therefore what matters most is your credit HISTORY.

From what you've listed in your post, the fact that you have a default from 2013 is probably a major factor - regardless of the amount, and if it has been settled or not, lenders typically don't like seeing these markers on your file. The £10000 of credit card debt, and recent credit card applications probably aren't helping either. Regardless of your intention to use them as a 0% balance transfer, they will be viewed as the worst case scenario, ie. you are taking on more debt, and your affordability will not be good either.

I'd recommend finding a specialist broker, or if you can wait until 2019 and not make any further applications for credit, the default will drop off your file (6 years since it was first registered) and the credit card applications will be sufficiently far in the past that you should have a better chance of getting a good deal. Closing any unused cards in the short term will probably help too, as will making a dent in the credit card debt