Rejected for a credit card and not sure why

financialnewcomer

New to the board so apologies for the long story and probably very obvious questions!

I recently separated from my wife. We had (and still have) joint bank accounts and mortgages. However the credit cards which we used were in her name - not for any bad reason, just she handled most of the financial paperwork although we were jointly responsible.

I had one credit card before we were married which I used for small purchases, but closed it around 10 years ago. I think the maximum I ever owed on it was around £1000 and I always met the payments and almost never used it for cash withdrawals. Generally speaking I've always been prety careful with money and have never been in financial difficulty.

My ex and I have a credit card with balance outstanding, and agreed that we would both get our own individual balance transfer credit card, transfer our own share of the debt (around £1700 each) and then pay it off ourselves.

I applied for a balance transfer credit card for this purpose through Tesco Bank. The pre-approval checks gave me a 95% chance of approval... however it was instantly rejected.

I've no idea why and now I'm worried about applying for any other credit cards in case the same thing happens and I start to get red flags against me for applying too often...

I've checked my credit rating - on Experian it is 953 and on ClearScore it's 445.

The two 'Let's Improve' insights on Clearscore are:

• Join the Electoral Roll - which is incredibly weird as I am on it, and voted last week... but my ex says this is also on her Clearscore account and it's never affected her...
• Get a credit card (as I don't have any credit history)

But everything else seems to be absolutely perfect - I've no history of missed payments, don't use any kind of overdraft and no judgements against me, I have a regular income... so I'm a bit stumped as to what to do next...

Questions are:


Is your credit score (the publicly visible one) actually important or is it just a marketing scam?

Does it matter that Clearscore says I'm not on the electoral roll? And how do I get this changed if it does matter?

Should I ask Tesco Bank to review why I was rejected and see if they can review the decision? Or is it a waste of time?

Should I try to get another balance transfer credit card? Or am I better off waiting 3 months or 6 months to avoid getting a negative record for multiple applications?

Should I apply for a very basic credit card now and pay it off each month to build up a positive credit history? (But again, if I apply for one now and I'm automatically rejected because of some weird algorithm, does this mean I'll go into some spiral where I get a bad credit rating because I've applied too many times?)

Any advice would be gratefully received - I don't  generally panic about money but the fact I've been rejected for the first card I've applied for has left me a bit financially vulnerable.

Emmia

Have you tried applying for a card with the bank you use for your current account?

Voyager2002

financialnewcomer said:

I had one credit card before we were married which I used for small purchases, but closed it around 10 years ago. I think the maximum I ever owed on it was around £1000 and I always met the payments and almost never used it for cash withdrawals. Generally speaking I've always been prety careful with money and have never been in financial difficulty.

An account closed ten years ago will make no difference at all today.

My ex and I have a credit card with balance outstanding, and agreed that we would both get our own individual balance transfer credit card, transfer our own share of the debt (around £1700 each) and then pay it off ourselves.

I applied for a balance transfer credit card for this purpose through Tesco Bank. The pre-approval checks gave me a 95% chance of approval... however it was instantly rejected.

I've no idea why and now I'm worried about applying for any other credit cards in case the same thing happens and I start to get red flags against me for applying too often...

Often there is no reason: these decisions seem to lack logic and there is an element of randomness.

Five or six applications in a short space of time would be a red flag; two or three are probably not a problem.

I've checked my credit rating - on Experian it is 953 and on ClearScore it's 445.

The two 'Let's Improve' insights on Clearscore are:

• Join the Electoral Roll - which is incredibly weird as I am on it, and voted last week... but my ex says this is also on her Clearscore account and it's never affected her...
• Get a credit card (as I don't have any credit history)

But everything else seems to be absolutely perfect - I've no history of missed payments, don't use any kind of overdraft and no judgements against me, I have a regular income... so I'm a bit stumped as to what to do next...

Questions are:


Is your credit score (the publicly visible one) actually important or is it just a marketing scam?

Does it matter that Clearscore says I'm not on the electoral roll? And how do I get this changed if it does matter?

None of this seems to be important: a lender will see that you are on the electoral roll, not that some agency thinks you are not. Do, however, ensure that your address on the electoral roll is exactly the same as on any application for credit.

Should I ask Tesco Bank to review why I was rejected and see if they can review the decision? Or is it a waste of time?

Total waste of time.

Should I try to get another balance transfer credit card? Or am I better off waiting 3 months or 6 months to avoid getting a negative record for multiple applications?

Should I apply for a very basic credit card now and pay it off each month to build up a positive credit history? (But again, if I apply for one now and I'm automatically rejected because of some weird algorithm, does this mean I'll go into some spiral where I get a bad credit rating because I've applied too many times?)

Apply for maybe two or three more credit products, but then stop (whether or not you are offered anything).

Body is ten characters too short!

Hoenir

Try another financial institution. Tesco Bank has been sold to Barclays. Changes maybe afoot. 

CliveOfIndia

financialnewcomer said:

I had one credit card before we were married which I used for small purchases, but closed it around 10 years ago.

This will have dropped off your credit report, so won't be having any effect now.

financialnewcomer said:

I recently separated from my wife. We had (and still have) joint bank accounts and mortgages. However the credit cards which we used were in her name

Sounds likely that it's simply a lack of credit history that's the issue.  Whilst a mortgage (assuming you're keeping up with payments) will be helping to a small extent, it sounds like you've got no other credit products.  Any cards held by your wife with you as an additional cardholder won't have any impact on your credit history.

financialnewcomer said:

I've checked my credit rating - on Experian it is 953 and on ClearScore it's 445.

Your score means absolutely nothing - it's not used, nor even seen, by any lender.

financialnewcomer said:

The two 'Let's Improve' insights on Clearscore are:

• Join the Electoral Roll - which is incredibly weird as I am on it, and voted last week... but my ex says this is also on her Clearscore account and it's never affected her...
• Get a credit card (as I don't have any credit history)

The simplest option is to try and apply for a credit-builder card, use it for routine purchase and always repay in full every month.  Over time this will build up a decent credit history, after which you can try applying for a more mainstream (or BT) card.  But it's not a quick fix, you'll probably be looking at something like a year or so before you find yourself eligible for a "better" card.

financialnewcomer said:

Should I ask Tesco Bank to review why I was rejected and see if they can review the decision? Or is it a waste of time?

Waste of time - the internal scoring (which has nothing at all to do with the score you see on your CRA credit report) is completely automated, and cannot be overridden by staff (well, I guess in theory it could be, but it would have to be quite exceptional circumstances for them to invest the man-hours to do a manual review).

You could try applying to a different lender, but do an eligibility check first, ideally on their own website rather than a third-party aggregator.  Whilst still by no means a guarantee, they do tend to give a slightly more accurate prediction, not least because they will factor in some of their own specific acceptance criteria.

Hoenir said:

Tesco Bank has been sold to Barclays.

Not yet it hasn't.  They are still technically competitors until the deal has been given the legal and regulatory go-ahead.

ManyWays

Lenders don't see let alone use the credit scores you see. However credit scores can be a flag when something odd is happening and I think that Clear Score one is unusually low. What accounts show on the report and does it have your current account? Is the address on your current account exactly the same as on Clear Score?

Having said that however the main problem here is your lack of credit history which will make it harder to get 0% balance transfer cards. You can apply for a credit builder card or ask your bank for a card, then repay this in full every month. But it will take months to have much impact.

When does the 0% period on the card in your wife's name end? Can you set up a standing order to pay enough a month to her to clear your half before it ends? 

financialnewcomer

Thanks for all the comments which are very helpful

@ManyWays my ex wants to pay her share back quickly hence she wants to split the balance into two amounts which are our own responsibility.

@Emmia I am trying to apply for a NatWest balance transfer card today as our mortgage is with them (I say trying as every time I try and apply it says 'we can't continue with your application online'... currently waiting on their help chat trying to establish if this is a website issue or if I'm somehow not eligible

But as a starting point, I have a current account with Monzo so I guess the easiest thing to do is build up a credit history by getting Monzo Flex and using it for simple purchases and repaying each month..?

CliveOfIndia

financialnewcomer said:

But as a starting point, I have a current account with Monzo so I guess the easiest thing to do is build up a credit history by getting Monzo Flex and using it for simple purchases and repaying each month..?

This could be a good approach.  The fundamental issue you have is a lack of credit history, so a lender has very little data to go on when they search your credit record.  The rationale behind approaching your current account provider is that, in the absence of anything more concrete, they can at least see how you've been managing your finances with them.

There are no guarantees, of course, but it can be a good starting point.  And it's still wise to do an eligibility check with them first, before making a full application, so you can get at least some idea of your chances of being accepted.

One thought occurs to me though.  What timescales are you talking about, in terms of having to pay off the existing credit card debt?  Even assuming you can get accepted for a new credit card, it's going to take some time to build up a decent history (there's no hard-and-fast rule, each lender will take a different view, but I would hazard a guess that you're looking at something like 6 - 12 months at least).

Whilst transferring the balance to a 0% card would be the ideal scenario, what are your options if that turns out not to be possible?  Do you have money available that you could use to just pay off your share and have done with it?

financialnewcomer

@CliveOfIndia short answer no, I wouldn't have the cash to pay it off right now - however my ex and I are on friendly terms so if I'm not approved for a balance transfer card, she'd be understanding of my situation (especially as effectively the reason I can't seem to get credit is because we put the credit cards in her name.)

I appear to have been approved for a Natwest card this morning... however the latest sticking point is the Mitek verification process appears not to be working (submitted documents half an hour ago and they are still 'under review' when these things usually work straight away if they work at all..) so I'm not 100% sure if I'll get the card or not.

Emmia

(Technically) legally the whole debt is the sole responsibility of your ex as they are the cardholder, you had a secondary card on their account. Your obligation to pay is really moral only. 

I think you should pay it, as you've agreed to do so.

400ixl

Although credit car scores in the UK are pretty meaningless, the Clearscore one being so low could be due to something recorded on your credit history with them. That part is not meaningless, so go and see what your actual credit report says. Does it have any missed payments recorded, CCJ's against you etc.