Very good credit rating but still turned down by lender

ComposCorner

I applied to buy a mobile phone on-line at 0% finance over 24 months and was turned down by the manufacturer's bank. I checked my credit rating, which is good, in fact one agency gave me 987 out of 1,000. I am retired, aged 74, own my home with no mortgage and have never been over drawn or bankrupt. Both my credit cards are paid off in full every month and I have a healthy bank balance as well as cash savings with two building societies and NS&I. I checked on-line with my bank and was informed that it is highly likely that I would be granted a loan of £24,000 to buy a car. The mobile phone's lending bank would not give me a reason for turning me down for a mobile phone costing less that £1,000. I am very concerned that this might have a bearing in future when I do actually need to change my car and take out a new agreement. Can anyone advise, please?

MattMattMattUK

ComposCorner said:

I applied to buy a mobile phone on-line at 0% finance over 24 months and was turned down by the manufacturer's bank. I checked my credit rating, which is good, in fact one agency gave me 987 out of 1,000. 

The number is entirely meaningless, it is just a marketing gimmick and means nothing. Bankrupts can have maximum scores and millionaires can have low scores.

ComposCorner said:

I am retired, aged 74, own my home with no mortgage and have never been over drawn or bankrupt. Both my credit cards are paid off in full every month and I have a healthy bank balance as well as cash savings with two building societies and NS&I. I checked on-line with my bank and was informed that it is highly likely that I would be granted a loan of £24,000 to buy a car. The mobile phone's lending bank would not give me a reason for turning me down for a mobile phone costing less that £1,000.

The reason you were declined is that you do not meet their lending criteria, they do not have to give you a reason why they will not lend to you beyond that and they will not disclose why as it is commercially sensitive information. They cannot see your savings, they cannot see your bank balance (beyond an overdraft if one exists), nor do they care about savings as you could spend them. I suspect your age may be a factor, as potentially would be your income depending on how our private pensions are structured (eg drawdown vs defined benefit, vs income from an invested pension pot etc.)

ComposCorner said:

I am very concerned that this might have a bearing in future when I do actually need to change my car and take out a new agreement.

The decline of the finance for a mobile phone will not impact any potential acceptance or declining of credit for a car. Whether a future lender is willing to lend to you to purchase a car is another question and will be based on your circumstances at the time.

ComposCorner said:

Can anyone advise, please?

Firstly do not buy a £1,000 phone, one at half that price will be more than adequate. Secondly do not borrow to do it, use some of your savings, that would alleviate the issue. Thirdly, do not expect to be able to borrow to buy a car, even though it may be entirely possible.

FindMyWayBack

Scores are almost meaningless, what they are looking for is history, income and utilisation of revolving credit, existing credit accounts and affordability.

fatbelly

Yes, I suspect age is the issue though you'll never know for sure.

Luckily you can be a cash buyer and get the best deals that there are 

https://www.hotukdeals.com/tag/broadband-phone-service

adamp87

With respect I don’t think people should be telling you what you can or can’t spend your money on. If you can afford a £1000 phone and want to then go for it.

For some reason phones seem to be quite picky if you look at other posts on this forum. Which is strange as it seems that everyone who turns 18 seems to get a contract but anyway..

We can speculate it could be age, it could be no employment affects things - we can’t say. 

Potentially you could use a 0% card if you had one or buy out right if it’s affordable to begin with but generally wouldn’t be concerned. You just aren’t the customer they are looking for

Grumpy_chap

ComposCorner said:

I applied to buy a mobile phone on-line at 0% finance over 24 months and was turned down by the manufacturer's bank. I checked my credit rating, which is good, in fact one agency gave me 987 out of 1,000. I am retired, aged 74, own my home with no mortgage and have never been over drawn or bankrupt. Both my credit cards are paid off in full every month and I have a healthy bank balance as well as cash savings with two building societies and NS&I. I checked on-line with my bank and was informed that it is highly likely that I would be granted a loan of £24,000 to buy a car. The mobile phone's lending bank would not give me a reason for turning me down for a mobile phone costing less that £1,000. I am very concerned that this might have a bearing in future when I do actually need to change my car and take out a new agreement. Can anyone advise, please?

Mobile phone providers do seem to have the oddest criteria for credit / service contracts and there are regular threads on the subject.  Here's another recent one:
https://forums.moneysavingexpert.com/discussion/comment/79728698#Comment_79728698

It could be because they look at income and not assets?
It could be because they want young customers that will burn through extra data and generate additional income?

The solution for the OP would seem to be to buy the phone outright and not bother with the credit line given the available healthy bank balance plus savings.