Not sure why I'm rejected for credit

I've just tried applying for a no-interest (spread the cost) finance on a new high-end laptop through my bank. I was rejected and it advised to check my credit score. This is the second time I have been rejected in 12 months.

I have checked Experian which is what this bank used and my credit rating was 999 (excellent). I also checked ClearScore and it was 860 and stable.

I have an excellent salary and little outgoings as I live with my parents. I have one credit card at £2k (at a £5k limit) and it's paid through direct debit every month. I have store credit but the balance is 0 (all paid off on time). I'm not sure why I'm being rejected. Can anyone help?

Ironically I had better chance had getting credit when I was self-employed and earning far less. I've been in my current job for almost 2 years now though.

Comments

  • MorningcoffeeIV
    MorningcoffeeIV Posts: 1,946 Forumite
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    Don't check your credit score. No one sees them and they don't tell you anything about your credit worthiness.

    Check all three credit reports to see what appears.
  • CliveOfIndia
    CliveOfIndia Posts: 1,332 Forumite
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    edited 2 March 2023 at 5:23PM
    harr1981 said:
    I've just tried applying for a no-interest (spread the cost) finance on a new high-end laptop through my bank.
    What sort of finance was it?  It's unusual for a bank to offer the typical type of "interest-free" credit that you often see advertised by retailers - or do you mean it was a credit card with a 0% purchase promotion?
    harr1981 said:
    I was rejected and it advised to check my credit score.
    Who advised you to check your score?  The score you see on your credit report is meaningless.  The score that does matter is the one that's generated internally by a lender, and no-one will ever get to see that.  All you can do is check the data contained in your file, make sure it's factually correct, and make sure that there are no negative markers on there that would give lenders cause for concern.
    harr1981 said:
    I have one credit card at £2k (at a £5k limit) and it's paid through direct debit every month.
    Does this imply that you're carrying a balance, rather than repaying in full every month?  Unless the card is on a 0% promotional rate, this may be viewed as a negative by many lenders.
    Aside from that, are you registered on the Electoral Roll?  That's quite a key thing in the eyes of most lenders.
    You can never know precisely why a lender rejects you, since their acceptance criteria are confidential and commercially sensitive.  Certain things will be common across all lenders - debt-to-income ratio, adverse credit history etc.  But aside from that, all you can do is check all 3 or your credit files and make sure the data contained in them is factually correct - though ignore the score and their assessment of your credit-worthiness.

  • cymruchris
    cymruchris Posts: 5,137 Forumite
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    harr1981 said:
    I've just tried applying for a no-interest (spread the cost) finance on a new high-end laptop through my bank. I was rejected and it advised to check my credit score. This is the second time I have been rejected in 12 months.

    I have checked Experian which is what this bank used and my credit rating was 999 (excellent). I also checked ClearScore and it was 860 and stable.

    I have an excellent salary and little outgoings as I live with my parents. I have one credit card at £2k (at a £5k limit) and it's paid through direct debit every month. I have store credit but the balance is 0 (all paid off on time). I'm not sure why I'm being rejected. Can anyone help?

    Ironically I had better chance had getting credit when I was self-employed and earning far less. I've been in my current job for almost 2 years now though.

    Did they say check your credit score or check your credit reference agency reports? The two are very different things. Your score is only seen by you. Nobody else. Not a single person. Anywhere. Companies may create their own internal score, but that's not related to the one you see when you log in to things like Experian or Clearscore.

    Granting credit is based on risk factors - and looking at the details you've provided, being someone that lives with parents and a relatively shallow credit file (as in you don't have a large number of active accounts) - you may be perceived as being a higher risk. (Even though in your own mind you're not).

    Are you on the electoral roll at your address?

    Do you have a mobile phone contract in  your name?

    The 'one credit card' that you have - does that show on the Experian credit report data? (Not all cards are reported to all credit reference agencies)
    An ex-bankrupt on a journey of recovery. Feel free to send me a DM reference credit building credit cards from the usual suspects :) Happy to help others going through what I've been through!
  • macman
    macman Posts: 53,078 Forumite
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    Living at home with your parents? Are any of the utility bills in your name? If not, then I suspect the problem is not your credit history, but your lack of it. Get a low-limit card, spend on it, and pay it off in full every month. Those are the transactions that lenders see, not your fictitious credit score.
    No free lunch, and no free laptop ;)
  • Casskale
    Casskale Posts: 33 Forumite
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    Banks don't offer zero percent finance deals directly so who offered you the 0% finance deal?

    I know Barclays may offer such a thing through Barclays Partner Finance but that's not through your bank, they're a separate business.

    Do you have a 2k balance on a credit card that you're paying something off each month or the balance every month?

    If it's the former it's hardly surprising,

    You have credit lines, already owe 2k and wish to put another 4-5k on credit.

    You can't afford credit.

     Try building your own gaming desktop, they're cheaper.
  • MalMonroe
    MalMonroe Posts: 5,783 Forumite
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    Hi, as macman says, above - you don't really have much credit history and lenders like to know that you are going to pay them back, of course.

    Another thing - you say you have an excellent salary but your credit card is at £2k. If you have an excellent salary and you want a loan, it would be a good idea to clear that card as soon as possible. Once it's clear then use it regularly and pay it off, in full, every month. I just set my direct debit to clear the balance. Lenders also don't like it if you are using more than a third of your available credit. (And there will usually be a reminder on your credit reports, something like 'you are using more than one third of your available credit'. It's frowned upon. Especially by Credit Karma, in my experience, for some reason.)

    There's that reminder on the front page here, too - "Remember MSE's stance on loans: 'borrow as little as possible, repay as quickly as possible'."

    You should thank your bank because they've saved you from making a big mistake. If you can learn from the advice you receive here, then we who have known big debt will be very pleased. Most of us learned our lessons the hard way, after the horse had bolted. You have the opportunity to learn from our mistakes.

    I'd also check all three of my credit reports, as suggested by morningcoffeeIV.
    Please note - taken from the Forum Rules and amended for my own personal use (with thanks) : It is up to you to investigate, check, double-check and check yet again before you make any decisions or take any action based on any information you glean from any of my posts. Although I do carry out careful research before posting and never intend to mislead or supply out-of-date or incorrect information, please do not rely 100% on what you are reading. Verify everything in order to protect yourself as you are responsible for any action you consequently take.
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