Why are we ineligible?

Flipjango

My husband and myself are reasonably high earners - in fact, he's a higher rate tax payer.  Our mortgage isn't excessive and we don't have massive childcare costs. We've been doing up our house and things are a little stretched at the moment so we decided to move some of our credit card debt onto a 0% card. But when I do the eligibility calculator I am being told we are ineligible for any credit card. This is only based on income versus costs (it only asks the income amounts, mortgage and childcare costs), and has no info about out current credit amounts, so is not specific to our circumstances, but the amount in versus the amount out looks very healthy on paper. I'm completely at a loss as to why we would be ineligible? Is it possible to earn too much to be eligible? I'm self employed if that makes any difference.

lr1277

If you sum up both your incomes and both your credit limits, are you willing to tell us the percentage of your credit limits are to your total salaries?

You may need to reduce some of your existing credit limits before you are allowed more credit. I understand this might be difficult given as you say you are stretched.

From a card providers point of view, you may not do the balance transfer but just go spending with the new cards. Or you do the balance transfer but put even more debt onto the original cards thereby making your debt unaffordable.

These are the risks that card providers might be considering.

cymruchris

There could be a multitude of reasons.

Where are you looking to 'check eligibilty'? If it's a comparison site which lists a number of card providers - then try directly on the card provider websites.

If things are 'stretched' - it may be that you currently have too much debt putting you at a higher risk - and as a result may not see a wide choice of cards.

How much in £ does your current debt stand at? (to the nearest £1000) - for credit cards.

How much in £ does is your total credit limit across those cards (to the nearest £1000)

Do you have any personal loans? if so, what are the balances outstanding? (to the nearest £1000)

Total combined salary? (to the nearest thousand)

When soft checks are carried out for eligibility - they look at the details above to make an informed decision - even if you haven't told them in the 'questions' - they'll see a limited pool of your data.

If after checking your eligibility you still get zero percent on all cards - it would be worth checking your credit reference agency files (3 main ones) to ensure the information recorded is accurate. Check that there are no unknown CCJ's or any other nasties.

If after all that 'computer still says no' - then it's time to have a sit down, and thrash out how you're going to get the debt down without relying on further borrowing.

Hoenir

Lenders may also consider your finances to be "stretched".  Hence the lack of options. Refinancing debt may provide a solution but not the answer. 

Flipjango

I'm not sure you've understood my question @lr122 @cymruchris @Hoenir. I haven't given any information to anyone about our current lending or debt profiles so far.

This is what I have done:  On the MSE website in the credit card comparison section, there is this credit card eligibility calculator https://www.moneysavingexpert.com/eligibility/credit-cards/search/ which is a credit soft search that doesn't put a credit search on your file and which I did when researching cards. It doesn't ask about out current credit, only household income, childcare spending and mortgage. Our household income is around £330k. Our mortgage is £2800 a month and spending on childrens expenses is about £500 a month. This does not seem excessive, and we are not over stretched over the average year, we've just stretched a bit recently finishing the house. We both have excellent credit scores, but I don't believe this is checked in this search anyway. This is why I'm confused to be told we would not pass eligibility for any of the cards offered as we can clearly afford to pay them back. (If it were relevant, we have about £12k we wish to transfer, and access to about £20k of credit via two cards we already have, but as this isn't asked in the form I don't think this is relevant).

BoGoF

Household income £330k? Is that a typo?

You can safely ignore your 'score' as it means nothing.

MorningcoffeeIV

Flipjango said:

I'm not sure you've understood my question @lr122 @cymruchris @Hoenir. I haven't given any information to anyone about our current lending or debt profiles so far.

You've misunderstood. You don't need to tell them.

They get that data from your credit files on the soft check.

They wouldn't just take your word on your borrowing.

cymruchris

Flipjango said:

I'm not sure you've understood my question @lr122 @cymruchris @Hoenir. I haven't given any information to anyone about our current lending or debt profiles so far.

This is what I have done:  On the MSE website in the credit card comparison section, there is this credit card eligibility calculator https://www.moneysavingexpert.com/eligibility/credit-cards/search/ which is a credit soft search that doesn't put a credit search on your file and which I did when researching cards. It doesn't ask about out current credit, only household income, childcare spending and mortgage. Our household income is around £330k. Our mortgage is £2800 a month and spending on childrens expenses is about £500 a month. This does not seem excessive, and we are not over stretched over the average year, we've just stretched a bit recently finishing the house. We both have excellent credit scores, but I don't believe this is checked in this search anyway. This is why I'm confused to be told we would not pass eligibility for any of the cards offered as we can clearly afford to pay them back. (If it were relevant, we have about £12k we wish to transfer, and access to about £20k of credit via two cards we already have, but as this isn't asked in the form I don't think this is relevant).

Sadly we think it's you that has misunderstood what they can see - you put in your name, address etc - then it goes to look at a limited version of your credit history. They can see how many accounts you have and a lot more. It's called a soft search where they access some of your data to risk profile you, and on doing that the credit card search has said no.

It doesn't matter what you think is affordable - or how you think you can manage it - the computer still says no.

As I mentioned though - you need to run the eligibility checkers on lenders direct websites. And as I also mentioned - you need to check both of your credit reference agencies on the three main providers to ensure that the data is accurate, and there are no hidden nasties.

Scores are as useful as a chocolate teapot holding boiling water. Use them as a personal indicator if you want - but nobody else sees them, and they are often way off in terms of accuracy.

If your income is accurate there - that would mean you'd be taking home after tax well in excess of £10k a month - and with a mortgage of just under £3k a month, should put you in a position to repay any outstanding card balances quite quickly moving forwards if you focused on some short term spending cuts to get you debt free sooner? Or are there other debts you haven't mentioned?

You've given us a bit of info so we have a bit more context which is helpful, and you've mentioned there have been some home improvements - are they complete - and so you now have a monthly disposable income of a few thousand pounds? (Have you had a sit down to see where the money is actually going? Are you getting the best value for all your contracts? Are you on the best deals? Are there areas you can economise on for a few months to get rid of these balances? This might be preferable to trying to kick the can down the road with a 0 percent card. - as much as you're confident you can manage it - and I don't doubt you will -  the good old computer analsyis currently says differently).

Flipjango

Thanks for the assistance @cymruchris, but its not as bad as it sounds - we don't have financial troubles  and are very sensibly set up with savings. But we do need to kick the can a little into the later part of the year, as my husband is primarily paid on commission which is paid in the 2nd half of the year. So in the first half we have a much smaller income, and then it ramps up later. Because the prices of finishing our project went up rapidly with the sharp rises in materials last year (considerably more than the QS had priced), but by that point we had a half built house we needed to finish, we ended up having to spend most of our cash savings. We still have a BTL rental property and shares, but it's not sensible to dig into that at the moment, and still better to leave it on CC's, even if paying interest. But obviously i'd rather not be!

cymruchris

Flipjango said:

Thanks for the assistance @cymruchris, but its not as bad as it sounds - we don't have financial troubles  and are very sensibly set up with savings. But we do need to kick the can a little into the later part of the year, as my husband is primarily paid on commission which is paid in the 2nd half of the year. So in the first half we have a much smaller income, and then it ramps up later. Because the prices of finishing our project went up rapidly with the sharp rises in materials last year (considerably more than the QS had priced), but by that point we had a half built house we needed to finish, we ended up having to spend most of our cash savings. We still have a BTL rental property and shares, but it's not sensible to dig into that at the moment, and still better to leave it on CC's, even if paying interest. But obviously i'd rather not be!

That's a bit more context which helps understanding. My advice above still stands - try eligibility checkers directly - check your files for errors and discrepancies.

If it's still a no - then you'll have to work around other options.

There can be many reasons why they say no - and they'll never tell you specifically why.