Unexpected rejection

samuelmorris

As the balance is starting to rack up on my regular credit card I thought it high time to apply for a 0% balance transfer card to help with paying the balance off.

Prior to applying, I checked my experian score (not foolproof I admit but at least a guideline) and it came back with 984. I chose to apply for a recommended card on MoneySupermarket with HSBC - I forget the exact terms but it was around 27 months 0% and 20% APR thereafter with a 1.4% or so transfer fee. Reading the basic terms I didn't find anything untoward.

My application was straight-up declined and after speaking to HSBC about it all it will say is that the application was declined based on my credit score. They won't specify which agency declined the application or why.

This obviously came as a bit of a surprise. The last (and pretty much only) time I missed a credit card payment was over 10 years ago. I have no dependents, am full time employed with a modest but near-UK-average salary and have two existing credit agreements both in good standing - the aforementioned credit card which I've had for 6 years, and a car PCP arrangement which has been running for 9 months so far. The only thing that might count against me is not having a mortgage. There are also three mobile service contracts in my name but I'm not sure how much of a difference they make. They've also all been running for 5+ years.

Could anyone suggest what I should do next? I'm not about to be ruined by debt but I'm up to around £100 a month on credit card interest which is really slowing down my ability to pay off the balance. I'm mindful that being declined this application may make it difficult to apply elsewhere, and if a near-perfect Experian score with credit history and no missed payments in almost a decade isn't enough for a balance transfer card, what are my alternatives? Is it worth applying for another with a different bank, and if so, how soon after?

Thanks in advance

jester212

Have a look at either Bank of Scotland, Halifax or Lloyds. They have eligibility checkers and will give you a rough idea of acceptance before you do another full credit check. Granted that even with a high % chance of acceptance you may still be declined.

BoGoF

First of no credit agency declined your application as you seem to think. HSBC will have made their own decision based on your credit history.....not your fictional score. You do not have a 'near perfect score'.

You don't say how much cc debt you have or your income or other debts. Stating these would be helpful.

DCFC79

Im not sure they said it was declined on your score, I wonder if they said it was your internal score with the bank.

There 2 other agencies theh could have checked.

Read this, it might have some clues. https://forums.moneysavingexpert.com/discussion/5966811/my-banks-higher-interest-rate-compared-to

[Deleted User]

Thread bookmarked for the naysayers that think the score means everything

As proven the score means nothing when it comes to lending - you would have failed to meet their own internal scoring system not the made up one from the CRA’s.

Use an eligibility checker elsewhere and see what that comes back with

Ben8282

You mention that a balance is starting to rack up on your current credit card.
I would imagine that this is the reason for the rejection. HSBC can see that you are getting yourself into debt month after month with an increasing balance and didn't fancy you as a customer.

samuelmorris

Thanks for the replies - indeed based on my circumstances (and it doesn't even ask about what amount of debt I have) - the HSBC cards on the MSE checker show up as 0% - ineligible, although it doesn't elaborate on why.

I take the point about the increasing debt, however this has been over a fairly considerable period of time. Currently the balance is around £5200, which is very similar to an amount I helped transfer to a 0% balance transfer for my dad a few years back, with no hassle.

I'm well aware that the Experian credit score is not a figure that lenders will see or that it's a guarantee of eligibility for credit and I did also cover that in my post.
HSBC's wording was somewhat curious, their explanation was 'your application was declined based on credit scording' in their words. The agent I spoke to didn't explicitly state that it was HSBC's credit scoring system and indeed was very keen to pass the 'blame' for the decision to the credit bureau. The first person I spoke to just gave me Equifax's number (without taking my details) to get an explanation for the rejection.

Since I don't see the harm in posting it, my salary is £25200 pa (£19700 after tax). My rent is £520 pcm and the car PCP agreement is £366 pcm for 36 months.

The most likely options (95%) on MSE's site are the Barclaycard balance transfer cards, but I'm not really sure I understand why?

BoGoF

So rent and your PCP alone is accounting for half your take home pay......add on the minimum paymwnt for your card and affordability becomes an issue.

samuelmorris

Hence the desire to switch to a 0% transfer card to reduce that debt. I can understand receiving a weaker offer in terms of fewer months 0%, higher fee etc. based on those circumstances, but flat-out rejection seemed odd - I've had a friend run the eligibility checker who earns around a third more than me and they came out with 50% chance for the HSBC card - bearing in mind the MSE checker doesn't even ask what your current amount of debt is, I suspect it's as simple as that - HSBC don't offer that card to people earning less than, say, £30k. Such requirements, however, in my opinion should really be stated at the outset.

BoGoF

But in their eyes you are taking on additional debt......their is no guarantee you would clear the other card with the new card. HSBC are probably pickier than most.

You didnt say how much you still owe on PCP, that will also be a factor.

[Deleted User]

HSBC are not obliged to state their lending criteria and neither is any other lender for that matter.

They were referring you to Equifax to check your credit file - and the score they are referring to will be HSBC’s own internal scoring system.

It seems that your outgoing to income ratio is pretty high - the thing to do is apply for the Barclaycard but use the eligibility checker on Barclays own website.

If that still fails then you’ll need to cut back in spending and through as much money at the card as possible to clear it down and look to apply again in a few months time.

Who do you bank with? Have you checked with them if you’re eligible for a credit card?