Rejected for £2 a month SIM card, but suggestions aren't helpful to improve score

adougl16

I have been rejected for a £2 a month SIM card after failing a credit check.
I have no debt apart from my mortgage, I've moved home once in the last 20 years, earn £51k, have changed job once in the last 8 years, have around £25k in savings, £1000 in my current account, one credit card, which I pay on time and have had for 9 years. I own my car and don't have any memberships to gyms etc.

The suggestions from experian to improve my credit score don't seem very useful/ helpful..

• Prove where you live Register on the electoral roll - I did this as soon as I moved in and have been on the electoral roll for the last 22 years.
• Build your credit history - It doesn't actually give advice how to do this, just says "do it"
• Keep your credit utilisation low - The limit on my card is £200, Halifax have said this is as low as they go
• See if you could get an instant score boost - having read the pinned thread I'm not sure there is any value in this, however happy to do it if it is worthwhile
• Monitor your credit file for fraudulent activity - I am unaware of any fraudulent activity and I'm sure this would have been flagged up when I moved last year
• Avoid moving home a lot if you can - I moved last year, can't be helped
• Keep old accounts open and show a long credit history - I've had the same card for 9 years
• Consider getting a credit builder card - Open to suggestions for this please.

born_again

I  would guess that something did not match on the system.

You score is meaning less figure & will have had no impact on the rejection.

Isthisforreal99

You need a better credit history than you currently have - a £200 credit limit is next to useless.

You may be misunderstanding what low credit utilisation means - if you have a £200 limit and a £175 balance that is 75% credit utilisation whereas £500 on a £5000 limit is only 10%. 

My suggestion would be to increase the credit limit and use the card but clear the statemented balance in full every month.

flaneurs_lobster

The rejection is clearly not on the grounds of affordability although we can only speculate on such rejections - reasons are never given.

I'd guess that it's a combination of a recent-ish house move and a lack of any significant credit utilisation. I'd be tempted to get the credit limit upped on the credit card to something in the four-figures and put all my day-to-day spending on it (and pay it all off each month), just to show how good you are at "managing your debt". 

You might as well get sight of your credit reports from the other two credit reference agencies too, just in case there's an erroneous entry there that might be tripping things up.

CliveOfIndia

You've been given good advice already.  But for future reference, you may find the following points useful:

adougl16 said:

have around £25k in savings, £1000 in my current account - Savings are never taken into account when making lending decisions, purely because you could spend the whole lot tomorrow.

The suggestions from experian to improve my credit score don't seem very useful/ helpful..  Ignore your score.  It's not used by - indeed, it's not even visible to - lenders.

• 
  
• Build your credit history - It doesn't actually give advice how to do this, just says "do it".  Regular usage of a credit card and always paying in full is the simplest method.  Basically you want to demonstrate that you can use credit responsibly and always repay what you owe.
• Keep your credit utilisation low - The limit on my card is £200, Halifax have said this is as low as they go.  Utilisation refers to how much of your available credit you use - for instance, if the limit on your card was £5000 and you only ever used £200 per month, that would give you a low utilisation percentage.  Having said that, if you're always repaying in full every month without fail, it really doesn't matter how much of your limit you're using.  The CRAs do like to go on about it, but a lender doesn't care as long as you're not carrying a balance from one month to the next.
• See if you could get an instant score boost - having read the pinned thread I'm not sure there is any value in this, however happy to do it if it is worthwhile.  It's pointless.  Indeed, the very fact that you can magically boost your score just proves how worthless it is.
• Consider getting a credit builder card - Open to suggestions for this please.  There's no need to do this if you already have a card.  It would perhaps be worth seeing if they'll increase your limit, or switch to a different card with a higher limit.  But don't ever spend more than you can afford.  You absolutely must always repay in full every month without fail.

As FL says above, it's not down to affordability - there's just something on your history that their system doesn't like.  Check all 3 of your reports, just to make sure there are no adverse entries that perhaps you're unaware of.

kimwp

Isthisforreal99 said:

You need a better credit history than you currently have - a £200 credit limit is next to useless.

You may be misunderstanding what low credit utilisation means - if you have a £200 limit and a £175 balance that is 75% credit utilisation whereas £500 on a £5000 limit is only 10%. 

My suggestion would be to increase the credit limit and use the card but clear the statemented balance in full every month.

Exactly this. Increasing your credit limit but maintaining how much you put on it (and paying it off in full) is the way to go.

Having £200 limit (particularly if you've reduced this recently) will look like that is all a lender is willing to give you. Using most of that limit will give you a very high utilisation. It's a balance between how much credit you have available (Vs your income) and how much of your available credit you use (utilisation). But 10k against a wage of 50k and using and paying off £200 should put you in a good situation.

flaneurs_lobster

I'd add that the credit reference agencies always include helpful ways for you to "increase your credit score" on their reports, in fact this is the reason why they include the (meaningless) score in the first place - they suggest applying  for one of the credit products that they have helpfully included links to in the report.

They are credit brokers and make their money as commission from the credit companies they have introduced you to.