Experian and mobile phone eligibility

Faye449

MSE thread 

Morning all,

Question about my Experian credit score if you don’t mind?

On 21st April I transferred a Lloyds credit card balance that was coming to the end of 0% to a NatWest card with a 36 month 0% balance transfer offer (that I found on here so thank you very much for that as well) and didn’t think any more of it until my old iPhone started dying in front of my eyes and got rejected by Klarna for a new one. I’m already with Giffgaff and they had a an offer that suited me so I was going to go with that for simplicity but apparently I did not qualify for the deal offered due to my credit score (klarna counter offered me with something outrageous that I didn’t want) so I went looking at Experian. 

Although I had a ‘very good’ score of 1025 it showed that I had almost used up all of my available credit because the 0% balance was still showing on the Lloyds card as well as the new NatWest card. I had no idea that would happen. It’s updated yesterday as a month on its been through another billing cycle but there is still a ‘medium’ on the account advising that I have used up 40% of my available credit and a ‘low’ from the hard credit search from Klarna. Overall has increased a touch to 1049. I still need a new phone. Am I going to be able to get one from the usual resellers/carriers on a monthly contract or will I be rejected due to the medium/low and make it worse by applying again? Is there such a thing as a mobile phone eligibility calculator?

Brie

If I understand rightly the issue here is too much available credit.

So you have a £X credit limit on your NatWest card. And you have a £Y limit on your Lloyds card. You possibly also have motor or home insurance being paid monthly, an overdraft, a mortgage, catalogue account. Maybe other credit cards.

If you apply for more credit Klarna will look at what you are using plus what you have available. They have to assume that you might go out tomorrow and max your cards and overdraft and therefore have insufficient income to service it all.

So my suggestion is to not try to get more credit at this time. It sounds like you have credit available on your Lloyds card. Buy a phone outright using that and then, if possible, transfer all or some of the balance to your NatWest card to get the 0%.

If this is going to strain your finances then you need to look at alternatives. Maybe not an iPhone? Or at least not a new one? Not a recommendation but as an example a mint condition iPhone17 can be had for under £600.

CeX (UK) : Stock search

Nasqueron

https://forums.moneysavingexpert.com/discussion/comment/82006888#Comment_82006888

To counter your point, which you seem to make often - no lenders don't automatically assume high available credit = you will spend it all and factor that into lending resulting into automatic declines. Many of us have significantly higher available credit limits than OP and have no problems getting more credit. Lenders do consider available credit but crucially also look at your history - a person with years of paying off their cards on time and/or in full is not much of a risk of running up huge debts

Brie

@Nasqueron possibly you also have a higher income or less debts requiring monthly payments. High available credit, used or not, can lead to declines. It's not the only factor but it's one that people need to consider. There's also the slow reporting to the credit agencies, hard searches, frequent address changes etc etc. Looking at a person's actual credit servicing is a crucial thing of course and is why asking for credit from the same bank where accounts are held is helpful as the bank can see much more detail than one that can't access those personal details.

Nasqueron

https://forums.moneysavingexpert.com/discussion/comment/82007260#Comment_82007260

I have had up to about £12k debt on about 26k salary (all on 0%), I earn more now, still plodding along stoozing with about 10k debt left.

You cannot in good faith make this statement

High available credit, used or not, can lead to declines.

You are not the lender, you didn't create the scoring systems for lenders, there is no validity to this statement as the lending criteria is commercially sensitive

Brie

@Nasqueron

I'll stick with my statement - high available credit can lead to declines. I've been told this directly by lenders when I have been trying to get credit as well as my own employers when I was working in the finance industry. I don't say it definitely will lead to declines, just that it might do so.

I've got rid of almost all my stoozing debt as I no longer need it and can't get an increased limit on one particular card I like to use because of the shockingly high amount of unused credit I have available.

Nasqueron

https://forums.moneysavingexpert.com/discussion/comment/82007662#Comment_82007662

That's fine, it just always needs the caveat that you cannot say that with any authority, lenders do not tell you their criteria, the customer service agents just have scripted answers to tell people; employers should not be telling you confidential information, nor should they be allowing lending criteria be disseminated so I suspect again it was a generic answer, part of a range of calculations. It's fairly obvious that any lending calculation by a firm would look at previous credit history and someone with a 6 year history of no missed payments, no late payments, responsible use of credit etc would be the deciding factor, particularly if they have a lot of available credit and don't misuse it. It's also obvious that such a person is highly unlikely to suddenly run up a load of unaffordable debt out of the blue which is what algorithms work on.

Repeating it as fact is simply spreading misinformation, something the forum discourages.

Nebulous2

We've been round the block on this before.

I've had twice my income in available credit for at least 20 years, at times over three times my income. Lenders have always been happy to throw more at me.

The only time the offers have reduced have been when I am stoozing and my debt goes up over half my income, and then it really tightens up when my debt approaches my income.

On the other side of the equation lenders may regard high limits as a positive because the other lender trusts you!