Can I still transfer the balance?

rgsoton

Hi. I was trying to move a CC debt to earn a few quid via TCB.  Thought I’d been really clever until I discovered the credit limit that they’ve agreed to doesn’t cover the amount! 🤦‍♂️

So half of the debt will be transferred pretty much but my questions are: 1.I’m guessing I’ll be accepted what with good credit rating to just get another balance transfer straight away to transfer the other half (solely to get the cash back) and 2.every time I apply for these my credit score is negatively affected. Right?  

Thanks. 

[Deleted User]

Nobody ever sees your credit score except you, all that matters is the credit history. Someone with a low "score" but a solid history of paying off on time every month is more appealing to lenders than a higher score with late payments in the past.

You could apply for another card but no guarantee you would get enough

rgsoton

Thanks. That’s helpful. 

rgsoton

How do these companies set the credit limit then?  And I guess there is no guarantee until after they say “yes” of knowing how much they will set it at?

Ebe_Scrooge

rgsoton said:

How do these companies set the credit limit then? 

They take the data contained within your credit file, churn it through their algorithms, and see what the computer spits out.  Every lender will have different criteria (which are confidential and commercially sensitive, so no-one will ever know what they are), and will assign different weightings to different factors.  For instance, 1 lender may have a policy of "we won't lend to anyone that's had a late payment at all", another might say "up to 2 late payments in the last 5 years is OK, as long as the most recent is older than 2.5 years, but we'll increase the APR we offer".

They'll have lots of internal policies, their appetite for risk will be different, their "ideal customer" profile will be different.  So no-one can say how they set their limits, or their interest rates.  But certain things tend to be common across all lenders. A key factor is your income to debt ratio.  A CCJ is a big red flag for pretty much all lenders.  A solid history of responsible borrowing and repayment is a positive indicator.

rgsoton said:

And I guess there is no guarantee until after they say “yes” of knowing how much they will set it at?

Exactly this.  It's not until they've searched your credit files and churned the data that they will decide if, how much and at what rate to lend to you.  And they can't do that until your application is formally submitted and processed.

rgsoton

Yep thanks.  That’s helpful. 

jcontest

rgsoton said:

How do these companies set the credit limit then?  And I guess there is no guarantee until after they say “yes” of knowing how much they will set it at?

When you apply you give them a income level.  That's calculated against your debt in your credit file (debt to income ratio) and they decide based on their own internal calculations what risk and level they can put you at.  Telling a lie about how much your income in is against the law (fraud), and on top of that some of these providers are in "groups" that will share (read validate) the information you provide to protect against fraud.  As to the level, It would be nice if you could see the limit before accepting, we recently took one out with 0% for two years and it says the level will be set around the time we receive the card.

[Deleted User]

jcontest said:

rgsoton said:

How do these companies set the credit limit then?  And I guess there is no guarantee until after they say “yes” of knowing how much they will set it at?

When you apply you give them a income level.  That's calculated against your debt in your credit file (debt to income ratio) and they decide based on their own internal calculations what risk and level they can put you at.  Telling a lie about how much your income in is against the law (fraud), and on top of that some of these providers are in "groups" that will share (read validate) the information you provide to protect against fraud.  As to the level, It would be nice if you could see the limit before accepting, we recently took one out with 0% for two years and it says the level will be set around the time we receive the card.

To add to this, while you're not going to get punished by the police you can end up with a CIFAS marker which will result in all your accounts being closed and little to no chance of credit for a few years