Sainsburys Balance Transfer - Rejected

born_again

If you are paying £500 a month on a car loan. Then unless you have a great take home pay and next to no other monthly expenditure. (do a tally up yourself to see your monthly disposable income) 
Then the rejection will most likely be on affordability issues.

callum9999

MattMattMattUK said:

YorkshireTeaDrinker said:

Is this something that's likely to cause me a lot of trouble going forward?

If the rest of your credit record is good then no, one declined application will make no real difference long term. 

I'd personally remove the "if the rest is good" caveat - it will make no long term difference period, regardless of what the rest of the report looks like.

And just for the OPs information, a decline isn't recorded on reports, only searches are. Nor will they ever ask if you've been declined for credit before - it would be a pointless question given they couldn't know why you've been declined. Not meeting the credit profile they're looking for on this specific day doesn't mean there's anything wrong with your record.

cymruchris

YorkshireTeaDrinker said:

It was a balance transfer card I was applying for with Sainsburys Bank. This was what I was rejected for.
The application process includes the balance transfer requirement. I put the £1500 I wanted to transfer & applied, then was rejected. Haven't had any email confirmation or anything from Sainburys etc.

So it was a full credit card application you made, which has rightfully resulted in a hard search on your file. Hindsight is a wonderful thing, but it might have been better to try the Sainsburys eligibility checker first, as indeed you should for any future credit card application. Ensure you do so directly on the corresponding banks website, and not on a comparison site, as that will give you a more accurate indication (But not guaranteed) of acceptance. From all of the posters talking about credit limits reducing and applications being declined, there seems enough evidence to support the fact that lenders are being more stringent in their acceptance of new applications and credit limit increases. 

One search won't cause you any trouble - however if you went on to make another 7 applications desperately seeking a new credit card, that would definitely have an impact. Wait 2-3 months, try the eligibility checkers of cards that interest you and try again.

YorkshireTeaDrinker

cymruchris said:

YorkshireTeaDrinker said:

It was a balance transfer card I was applying for with Sainsburys Bank. This was what I was rejected for.
The application process includes the balance transfer requirement. I put the £1500 I wanted to transfer & applied, then was rejected. Haven't had any email confirmation or anything from Sainburys etc.

So it was a full credit card application you made, which has rightfully resulted in a hard search on your file. Hindsight is a wonderful thing, but it might have been better to try the Sainsburys eligibility checker first, as indeed you should for any future credit card application. Ensure you do so directly on the corresponding banks website, and not on a comparison site, as that will give you a more accurate indication (But not guaranteed) of acceptance. From all of the posters talking about credit limits reducing and applications being declined, there seems enough evidence to support the fact that lenders are being more stringent in their acceptance of new applications and credit limit increases. 

One search won't cause you any trouble - however if you went on to make another 7 applications desperately seeking a new credit card, that would definitely have an impact. Wait 2-3 months, try the eligibility checkers of cards that interest you and try again.

Thanks! I did try the eligibility calculator on MSE & it said 80% chance of approval, so I just followed the link & made the application, silly me! I'll be paying off the o/s balance before the 0% rate expires & then won't have to make any applications (fingers crossed) for 18-24 months when I get a joint mortgage with my partner.

It was just a little unnerving being rejected, first time it's happened & wasn't really sure what to do/expect!

You've all been wonderfully helpful!

MattMattMattUK

callum9999 said:
I'd personally remove the "if the rest is good" caveat - it will make no long term difference period, regardless of what the rest of the report looks like.

The reason for the caveat was more that if there is a pattern of declined applications then that tends to be viewed negatively.

callum9999 said:
And just for the OPs information, a decline isn't recorded on reports, only searches are. 

Not quite, applications show and accounts show, banks are clever enough to put two and two together and get four, if someone has hard searches but no new accounts they can tell it was declined.

callum9999

MattMattMattUK said:

callum9999 said:
I'd personally remove the "if the rest is good" caveat - it will make no long term difference period, regardless of what the rest of the report looks like.

The reason for the caveat was more that if there is a pattern of declined applications then that tends to be viewed negatively.

callum9999 said:
And just for the OPs information, a decline isn't recorded on reports, only searches are. 

Not quite, applications show and accounts show, banks are clever enough to put two and two together and get four, if someone has hard searches but no new accounts they can tell it was declined.

I would still disagree. Long term (which was the timeframe you gave), it would not be visible - so it couldn't possibly be a long term issue, even if they have 100 searches this month.

They could take a guess, yes, but why would they? Putting aside the question of why they would care whether a different lender rejected them or not (there's a reason why they all use their own criteria and lenders reject people with perfectly fine credit reports all the time), there are perfectly valid reasons for declining credit after being approved. I'm certainly no expert (so if you actually know the underwriting process at specific companies that do this, I suppose I'll have to take your word for it!), but I highly doubt they would therefore do that. 

MattMattMattUK

callum9999 said:
I'm certainly no expert (so if you actually know the underwriting process at specific companies that do this, I suppose I'll have to take your word for it!), but I highly doubt they would therefore do that. 

I know part of one banking groups risk algorithm, a very good friend helped re-write it a few years ago and the part he specifically dealt with was to analyse records to look for applications that did not convert into accounts. There was some reasoning behind it, but I forget exactly what it was and the level of complexity in those risk calculation algorithms puts quantum mechanics to shame, so how much of an effect, if any it actually has on the end result, who knows. When the banks even look at the default rate of certain lenders (beyond categories such as payday lenders) and factor that in at various levels of the calculation you can see how complicated the whole process is. 

callum9999 said:

I would still disagree. Long term (which was the timeframe you gave), it would not be visible - so it couldn't possibly be a long term issue, even if they have 100 searches this month.

I will concede that long term one application is likely to make little difference if any difference, just so long as it does not become a pattern (eg apply and be declined every month or two). 

callum9999 said:

They could take a guess, yes, but why would they?

The amount of information banks and other financial institutions take into account is vast, I think in some cases it is less so why, merely just because they can. The amount of data collected and held relating to us all is huge and ever growing, most of it will be irrelevant to risk analysis for lending, but over time trends and correlations will pop up in weird and wonderful places and banks will want to be on top of that. 

Fingerbobs

MattMattMattUK said:

Not quite, applications show and accounts show, banks are clever enough to put two and two together and get four, if someone has hard searches but no new accounts they can tell it was declined.

It does not necessarily follow that a customer was declined credit if they have a search but no corresponding account. They could have been offered a product that wasn't interesting to them and so decided not to proceed with the application (this happened to me at least twice).

cymruchris

Fingerbobs said:

MattMattMattUK said:

Not quite, applications show and accounts show, banks are clever enough to put two and two together and get four, if someone has hard searches but no new accounts they can tell it was declined.

It does not necessarily follow that a customer was declined credit if they have a search but no corresponding account. They could have been offered a product that wasn't interesting to them and so decided not to proceed with the application (this happened to me at least twice).

It comes up quite frequently on the boards here - 'I applied for their 2.8% loan - and when it all went through I was given an APR of 12.5%!!!!' - there will be quite a number of people who at that stage, in that circumstance, would discontinue their application once they've worked out what the repayments were going to be over their term. So in essence, they've been accepted for credit, but haven't gone on to open an active account with the lender concerned. Not sure how other banks could see if someone was 'declined outright' or 'offered a product, but customer declined'.

It's a little bit like closing accounts - I wish that our magic history files recorded accounts that we as customers chose to close, as opposed to where banks have said 'your limit is being cut to XYZ and your account is being closed in 4 months time' - both would show as 'settled' in the long run, but the first is the consumers choice (not being too reliant on credit to be able to close an account) and the second is the banks choice (thinking that the consumer can't manage their credit or is now beyond their risk profile of an acceptable customer). 

Credit history files are not always as black and white as they could be, there are certainly some grey areas.

CreditCardJunkie

If you can pay it off, pay it off instead of shuffling debt around