Poor credit rating after early retirement

lisyloo

coppo233 wrote: »

Thanks for the replies. A couple of you mentioned 'paying yourself'. I am wondering how you make that 'stick' with any financial business you have to deal with?

I tried something that I thought similar to this which didn't work.....
I applied online for a card that I would normally expect to easily get just as a test. I stated my 'income' was about 2/3rds of my final salary (which in truth is what we are living on). The term 'income' was technically not correct though because the actual money is being trickled out of whatever is earning the lowest interest when we need it.. I was also rejected for that card though I don't know why exactly..This sounds to be similar to what the folk above are doing - only I got it wrong somehow.

The bank did ask me my income before rejecting the replacement credit card. I told them truthfully the amount (pretty small) but did say we had investments. That didn't help. There are monthly amounts paid into that account (and then moved) that could look in isolation like income. Perhaps being too truthful to the bank was my mistake there.

The next test will be trying to apply for new regular savers when the current batch run out. I wonder if I'll get rejected for new savings accounts - or just credit deals.

I don’t think you should be untruthful, but could you be resourceful?

If you have any instant access savings then could you pay yourself a larger “income” and then save some of it? I.e. put it back again?
There’s nothing wrong with saving from an income that’s higher than you need. A bit of a faff, but if you want the deals....

My husband pays me dividends from our limited company and I give him (personally) most of the money back. It’s a perfectly legal way to make use of my 7.5% tax band and for him to take money from the company paying min tax.

coyrls

coppo233 wrote: »

Thanks for the replies. A couple of you mentioned 'paying yourself'. I am wondering how you make that 'stick' with any financial business you have to deal with?

I tried something that I thought similar to this which didn't work.....
I applied online for a card that I would normally expect to easily get just as a test. I stated my 'income' was about 2/3rds of my final salary (which in truth is what we are living on). The term 'income' was technically not correct though because the actual money is being trickled out of whatever is earning the lowest interest when we need it.. I was also rejected for that card though I don't know why exactly..This sounds to be similar to what the folk above are doing - only I got it wrong somehow.

The bank did ask me my income before rejecting the replacement credit card. I told them truthfully the amount (pretty small) but did say we had investments. That didn't help. There are monthly amounts paid into that account (and then moved) that could look in isolation like income. Perhaps being too truthful to the bank was my mistake there.

The next test will be trying to apply for new regular savers when the current batch run out. I wonder if I'll get rejected for new savings accounts - or just credit deals.

[FONT=&quot]You need to find out why you are being rejected. I’m not sure that credit reference agencies have information about your income. I think it’s more based on credit history and other sources of information (e.g. electoral register, home ownership). I was give free access to my Equifax credit score because of a data breach and they list the components of the score as: Electoral Roll, Credit Agreements, Court Information, Financial Associates, Gone Away Records, CIFAS, Searches, Notice of Correction and Property Valuation. There is no reference to employment status or income.[/FONT]

[Deleted User]

The OP is very unlikely to find out why they're being rejected, beyond any very generic reasons.

The CRAs don't store employment or income data, but it's asked by lenders. Any rating or score that Experian give you can be safely discarded in the bin.

tigerspill

Do these problems also if you are a named card holder on someone else account (say on a spouses card)?

[Deleted User]

Decisions are made on the basis of the account holder, as they have responsibility for the account.

ermine

coppo233 wrote: »

I had just cancelled a a paid off 0% CC with my long term bank at the time.

That was unwise. Never surrender your credit cards on retiring until you are drawing a pension or otherwise have something you can put under 'income' . I still have my credit cards from when I was working. The financially independent are pariahs in the eyes of the financial industry. They assume everyone in the UK is living paycheck to paycheck because it's a reasonable assumption in 99% of cases. Very few people have capital but no income, and those people don't tend to want to borrow money, 'cos they have capital.

I had this experience when moving across country - I had to raise the funds myself to own two houses for a short while, where I thought it would be easy to get a mortgage on one of them. I could hear the disbelief in the mortgage broker's voice on the phone. People just didn't live like that in his world.

There is one place the investor of independent means can borrow from. Themselves - a flexible ISA like Charles Stanley's lets you take money out and as long as you repay the money within the same tax year you don't lose the ISA allowance. Obviously there are issues around being out of the market for a while and what happens if you need to borrow from yourself when the market has just swooned, but this helped me with the house bridging. One of the periods an investor may want to borrow money is over the tax year boundary, this doesn't work for that.

westv

Apart from when applying for a mortgage, do companies actually ever ask for proof of income or employment stàtus?

lisyloo

westv wrote: »

Apart from when applying for a mortgage, do companies actually ever ask for proof of income or employment stàtus?

In my experience not usually.
How does that help? Unless you want to make a fraudulent application.

westv

lisyloo wrote: »

In my experience not usually.
How does that help? Unless you want to make a fraudulent application.

Obviously it does matter if, say, your income drawďown is done as one lump sum in January but your credit application is in June.

lisyloo

westv wrote: »

Obviously it does matter if, say, your income drawďown is done as one lump sum in January but your credit application is in June.

Why?
If you’ve told the truth you still have the evidence of the lump sum?