Rant...

neilp

I finally became debt free this year, after making a huge amount of effort to clear thousands of pounds of loan and credit card debts. Anyway, this week I applied for a Capital One cashback credit card, and was declined. I checked my Experian credit file and score. Everything is fine, but my credit score is 100 points lower than 6 months ago when I had £6000+ in credit card debts. The only changes on the file are to account balances and a couple of applications for credit (I recently changed current account, though my old account remains open and the switching process ongoing).

I know credit scoring is about profit, not risk (and that all financial institutions have their own scoring systems), and with hindsight don't want the cashback card, but this is annoying and frustrating nonetheless.

Anyway, it is not a big deal but I wanted to get it off my chest! Have a good weekend.

Snaggles

Hiya, just a thought but have you closed any cards/accounts you are no longer using? Overall available credit (not just the account balances, but the actual limits you have available) can affect your credit rating, so if you have opened new accounts but not closed the old ones, maybe that could explain the lower score?

neilp

Hi, thanks! Yes I have - I suspect that the issue is a number of recent applications for credit (albeit three over six-month period), along with the fact that for the past few months I have not been using credit cards or servicing loans. I was planning to use the new card for cashback and never carry a balance, so Capital One would have made little money from me. On reflection, the amount of cashback I would have earned would have been relatively small, especially after the first three months, and I certainly do not need another credit card, so it is probably a good thing that I did not get it.

I just think it is annoying (if understandable) that people are penalised for being careful and responsible!

pavlovs_dog

i understand your pain neil.

ive never been in debt, yet have to jump through hoops to get my credit card company to raise my balance from a tiny, meagre amount to a slightly more realistic amount. even though i was reaching the balance on my card and paying it off, several time within a month, they still made me provide proof of earnings to show that i could 'afford' the increased limit :rolleyes:

i have friends who wouldnt know responsible credit management if it bit them on the bum who are offered insane amounts of credit at every turn. its so unfair

IvanOpinion

neilp wrote: »

I just think it is annoying (if understandable) that people are penalised for being careful and responsible!

Sadly that is the reality of 21st century living. Those that try to be responsible will ultimately end up picking up a significant proportion of the tab for those that are totally irresponsible (whether that be those reclaiming bank charges, those declaring bank ruptcy etc.).

I think you are being a little bit unfair by saying credit scoring is about profit rather than risk ... if that were the case then I would not stand a hope in hell of getting the sort of credit I enjoy (because I clear everything off each month) .. but yet got accepted on the capital one card. You may find that you are the result of the credit squeeze that is happening at the minute .. don't take it personally I have been hearing stories that more than 50% of applications are being turned down by various companies at the minute.


congratulations on clearing your debt and hopefully you can now start enjoying the benefits of not wasting a lot of money on charges and interest.

Ivan