Credit card refusal query

PMcB

Hi all. First post in ages so go easy.

I applied for a Sainsbury's up to 21 month 0% balance transfer credit card to transfer across £12k of debt from 3 existing cards. Upon acceptance (even following the MSE eligibility check method) I was offered 13 months at 0% and prior to signing up I then refused the offer. My reason for doing so was because I had noticed Natwest were offering similar for 22 months to existing customers but through their pre-eligibility checker I was informed that I was unlikely to get an offer. I would guess the time between both applications was about 10 minutes max.

Income and credit rating are both excellent so I cannot understand why Natwest didn't deem me eligible.

I am wondering if there is perhaps a red flag raised in that I applied for two cards essentially in short duration or perhaps my not accepting the Sainburys offer also raised an issue. Grateful if anyone with more knowledge than I would know why this happened or if there is a set time to wait between applications?

[Deleted User]

Firstly, your "excellent" rating is never seen by a lender, that is not a factor
Secondly, the fact you have 12k of debt that you are needing to bounce again alongside a history of paying back less than the balance every month (were you paying minimum or above that?) even at a promotional rate would have spooked them. Two card applications together, using a soft search, is not likely to have done anything either way.

It's a shame you turned down the 13 month offer as that would have been a good way to extend your debt repayments to give you time to clear it. Clearly your file is not something they're willing to take a gamble on, perhaps try a "lesser" card more suited for how lenders see you 

Ebe_Scrooge

Farfetch has hit the nail squarely on the head.  Ignore your score, quite simply the data contained within your credit file means you don't match the criteria for Sainsbury's best offer or for NatWest's card at all.  And lending criteria across the board have become a lot tighter in the last couple of years.

The £12k that you've currently got on existing cards - is that on standard APRs, or promotional rates?  If it's on standard APRs then that in itself is a red flag to many lenders - carrying a balance from month to month is often interpreted as a sign of financial hardship (unless it's on a promo).

PMcB said:

I am wondering if there is perhaps a red flag raised in that I applied for two cards essentially in short duration or perhaps my not accepting the Sainburys offer also raised an issue.

Two searches is not in itself a cause for concern.  But more than a couple in a short space of time begins to raise concerns for lenders.  And they don't see the outcome of a search (accepted or declined), so the fact that you chose not to take up the offer from Sainbury's is immaterial.

PMcB

Deleted_User said:

Firstly, your "excellent" rating is never seen by a lender, that is not a factor
Secondly, the fact you have 12k of debt that you are needing to bounce again alongside a history of paying back less than the balance every month (were you paying minimum or above that?) even at a promotional rate would have spooked them. Two card applications together, using a soft search, is not likely to have done anything either way.

It's a shame you turned down the 13 month offer as that would have been a good way to extend your debt repayments to give you time to clear it. Clearly your file is not something they're willing to take a gamble on, perhaps try a "lesser" card more suited for how lenders see you 

Thanks for your reply. I've always met min payments and serviced interest and on occasion paid more if I could. This is not debt that has accumulated due to interest charges.

PMcB

Ebe_Scrooge said:

Farfetch has hit the nail squarely on the head.  Ignore your score, quite simply the data contained within your credit file means you don't match the criteria for Sainsbury's best offer or for NatWest's card at all.  And lending criteria across the board have become a lot tighter in the last couple of years.

The £12k that you've currently got on existing cards - is that on standard APRs, or promotional rates?  If it's on standard APRs then that in itself is a red flag to many lenders - carrying a balance from month to month is often interpreted as a sign of financial hardship (unless it's on a promo).

PMcB said:

I am wondering if there is perhaps a red flag raised in that I applied for two cards essentially in short duration or perhaps my not accepting the Sainburys offer also raised an issue.

Two searches is not in itself a cause for concern.  But more than a couple in a short space of time begins to raise concerns for lenders.  And they don't see the outcome of a search (accepted or declined), so the fact that you chose not to take up the offer from Sainbury's is immaterial.

Thanks for replying. Yes the £12k is across 3 cards and is on standard APR's now having reduced a little during promotional rates. Keen to make a concerted effort now to get it paid off on a 0% card. 

MalMonroe

PMcB said:

Deleted_User said:

Firstly, your "excellent" rating is never seen by a lender, that is not a factor
Secondly, the fact you have 12k of debt that you are needing to bounce again alongside a history of paying back less than the balance every month (were you paying minimum or above that?) even at a promotional rate would have spooked them. Two card applications together, using a soft search, is not likely to have done anything either way.

It's a shame you turned down the 13 month offer as that would have been a good way to extend your debt repayments to give you time to clear it. Clearly your file is not something they're willing to take a gamble on, perhaps try a "lesser" card more suited for how lenders see you 

Thanks for your reply. I've always met min payments and serviced interest and on occasion paid more if I could. This is not debt that has accumulated due to interest charges.

So how has the debt accumulated? 

Just paying the minimum amounts raises red flags for lenders. See the recent article from this site -

https://www.moneysavingexpert.com/credit-cards/minimum-repayments-credit-card/

As others have said, it's a pity you didn't accept the Sainsbury's offer even though it wasn't exactly what you wanted, because before the end of the term you could have been looking around for another 0% transfer deal and your credit history may have then looked better to lenders. Even with a 0% interest rate it's a good idea to pay more than the minimum monthly amount. 
(Certainly in my experience anyway).

If your income is 'excellent', lenders will definitely be expecting you to repay - or even clear - the debt of £12k faster. 

And as we know, credit scores are not seen by anyone else so they don't count. 

[Deleted User]

Paying just the minimum will be the main reason why they said no to the full offer. You can somewhat game the system by paying minimum + a sum so it is recorded differently but it is ultimately a significant debt that you need to pay down and if you are going to start paying interest soon, you're really stuffed.

A cynic might say they could see it as a way to make more money from interest by giving you a shorter period, but equally these days, it comes down to a computer saying no. I'd try and get the Sainsbury's card anyway and at least shift the most important debt (the one with the highest rate of interest due to apply), pay the minimum + a sum onto that balance and throw everything at the other debt as quickly as you can.

Head to the Debt Free Wannabe pages and post a statement of affairs and people can see how you could save money, ditto the usual stuff - take in lunch and coffee to work, bike/bus rather than car if appropriate, reduce bills, sell stuff etc