Credit declined

Pwilk

Hi

I have applied for a credit card limit increase and a personal loan in the last few weeks and both have been declined. I reduced my credit limit from 5k to £100 at the start of my maternity leave in May 2018. I have been back at work since May this year. I was wanting to pay off my car finance and pay off some of my husband's debt in a 10k loan. The credit card increase was just to pay for a new car seat. Anyway both declined. I can't see why when I am the best I have ever been with money. Possibly the fact I asked to decrease my credit limit but really? It can't completely stop me surely?

DCFC79

Pwilk wrote: »

Hi

I have applied for a credit card limit increase and a personal loan in the last few weeks and both have been declined. I reduced my credit limit from 5k to £100 at the start of my maternity leave in May 2018. I have been back at work since May this year. I was wanting to pay off my car finance and pay off some of my husband's debt in a 10k loan. The credit card increase was just to pay for a new car seat. Anyway both declined. I can't see why when I am the best I have ever been with money. Possibly the fact I asked to decrease my credit limit but really? It can't completely stop me surely?

What do your credit files show ? Theres 3 credit reporting agencies to check, dont worry about the score as it's only seen by you.

Willing2Learn

Did you really reduce your card limit to £100, or is that a typo? Do you have any other debt in addition to the car finance?

Edit: And welcome to the forum Pwilk

[Deleted User]

Pwilk wrote: »

I can't see why when I am the best I have ever been with money. Possibly the fact I asked to decrease my credit limit but really? It can't completely stop me surely?

The very small limit tells lenders that either other lenders don't trust you, or you don't trust yourself with credit. Neither is appealing to them.

As DFC79 said, you need to check your three files to see what appears. Your current debt and low card limit are probably the problems.

Ben8282

Pwilk wrote: »

I reduced my credit limit from 5k to £100 at the start of my maternity leave in May 2018.

Why ever did you do this?

Pwilk

I honestly only thought reducing the limit would be seen as a good thing. I probably should have just closed the card.

I've checked my score and it says very good. Nothing really effecting me. Everything paid on time.

[Deleted User]

It's nice to have a good score, but it won't help you get credit.

Pwilk

Is there nothing I can do to rectify the situation?

[Deleted User]

You need to look at your three files and assess the situation. Look at them as a lender would, alongside your income.

Then you can consider what, if any, options you have.

The_Real_Cheddar_Bob

Something to think about is how much of your disposable credit you are using. I didn't lower my limit I closed two cards I didn't use as the available credit was £12k. I didn't want temptation to step in.
If this is the reason you did what you have then I am with you. It's just a shame it might be a reason as to the declined applications

Terry_Towelling

Reducing a credit limit is a reasonable way for a card issuer to reduce its exposure to bad debt and fraud. However, reducing the limit yourself is a good way of telling your card issuer that you don't trust yourself - not that they necessarily think in such simplistic terms. Have you actually spoken with the card company and explained that you reduced the limit purely whilst you were on maternity leave and that you are now back at work and would like it restored? Could be worth a try.

On the subject of paying off your car finance and some of your husband's debt with a loan, you must remember that this is not actually what you are doing. You are simply transferring debt from one place to another and not paying off anything.

If the loan interest would be less than the existing finance APRs then it makes sound sense to try and refinance - as long as the cause of the original debts has been addressed. In your case, the car finance is understandable, but what has caused your husband's debt? Is that debt likely to recur after you've transferred it into your name? Could your husband not try to refinance in his name?

I am guessing that refinancing your existing debts is probably being done to lower the APR and extend the repayment period, thereby reducing the monthly (and possibly, overall) outlay to create a bit of breathing space, but the way you write it down, and the fact it is you having to do it all, suggests there may be an issue with your overall financial arrangements.

I mean no insult by saying this, and I apologise in advance if I have jumped the gun, because I am well aware of the pressures of bringing up a child and having a reduced income through maternity leave. I also acknowledge that I don't really know anything about your lives, but it is just a feeling that I get.