Why is 999 a POOR credit rating?

Jolly_Roger

My wife has a credit rating of 999, which is one point shy of perfection. Despite this, she was turned down by both Barclaycard and Capital Card when she applied for their lowest APR credit cards. She checked various rating agencies, all of whom appeared to give her a nigh-perfect rating. She wrote to both above mentioned credit card issuers and asked them why she had been turned down, emphasising her rating, but both replied with meaningless, standard letters. She is so angry that she has used the customer feedback form sent with the BC letter to express her dissatisfaction.
Why wouldn't a 999 rating and a good income net you the best cards on offer?

twists_and_turns

It seems like a lot of people are being turned down for credit at the moment, despite having very good credit ratings. I'm assuming that banks just aren't dishing out cards like they used to.

Clariman

First of all no-one has a "right" to be lent money by a credit card issuer so there is no point feeling "angry"..... "disappointed" maybe but not angry. Secondly, the credit card ratings given by the CRAs are meaningless and are not even seen by the majority of lenders - they are just the CRA's opinion of your creditworthiness. Each lender does their own credit scoring.

When lenders decide whether to offer someone a card there are a number of things which they consider. One of these is the person's credit rating (as they assess it rather than a CRA) and another is whether that person fits the target market for that card. It could be your wife has the most stupendous credit rating that any earthly mortal has ever had, but if she isn't the type of customer an individual lender is looking for with that card at that moment, she might get declined.

Tell her not to take it personally.

Clariman

o_t_e

Just to reiterate Clariman's point the 'credit score' the agencies give you is meaningless - the only reason to access your credit file is to make sure the information it contains is accurate.

Individual lenders have there own credit scoring systems that they are not obliged to disclose to you - can't remember the subsection of the data protection act that allows for this but basically it's allowed as it's commercially sensitive and can be argued to constitute a trade secret.

If it's any help I used to work a an underwriter for a finance company and often applications would be automatically declined without any apparent reason - just low score - and we weren't allowed to overrule that decision. When it was down to an underwriter making the final decision that company basically wanted three years residence confirmed through electoral roll and/or existing credit and a good payment history; things that would see an application declined were undisclosed linked addresses where there might be poor credit or inconsistencies with the application data submitted compared with that supplied on prior applications.

As banks themselves are having trouble borrowing money right now it's probably not the best time to be looking for a new credit card - if you've applied to two cards in quick succession it's probably advisable to leave it for six months or so and then talk to friends about their experiences with their particular credit cards. For example Barclaycard have been lowering peoples credit limits over the last year so it does seem they are quite risk averse anyway and maybe not an ideal choice when it comes to getting a new card.

Niksan

I've been here with Capital before, usually you'll get a "but you can have this one @ 22% and a nice england flag on your card" etc etc although when I wrote and asked, they rereviewed my application and approved it, my guess is it's the automated check system, which will see you're hardly in debt and pay back quickly so they're not bothered, I saw a link before in another thread saying it's happening more when people who are able to manage their finances are being refused credit.

so, good with your finances, don't care, you're a letch, subprime, well we all know about that, so I guess the lure now goes to the people in the middle.

mrmarsupial

I was turned down for a capital one card even though my credit file is as perfect as I can imagine. I think thats the problem. They see there is no money to be made in me, afterall I dont even need the card I am only applying to make interest on my interest free spending so they are right. Oh well maybe they are catching on ....

MarchieCTID

Just to reiterate something that is said on the main site - your credit rating isn't used to assess how risky a customer you will be, rather it is used to assess how profitable a customer you will be. If the OP's wife has a 'perfect' credit rating, the credit card companies' assessment of your wife will be that she will more than likely pay off any outstanding balance in full each month, she will never pay any interest charges and she will never make them any money.

If it's any comfort, my dad recently applied for one of the CapitalOne cashback credit cards - he owns his own home, he's a top-rate tax payer, doesn't have any debts whatsoever. He submitted his application online, and he was initially told that his application would be further scrutinised before a decision was made; a few days later he got a letter from CapitalOne saying that his credit score wasn't good enough and his application had been rejected; however he could appeal the decision. He isn't going to bother chasing after them, but he knows just as they do that he would never pay them a penny of interest.

Thomas_Crown

MarchieCTID wrote: »

If the OP's wife has a 'perfect' credit rating, the credit card companies' assessment of your wife will be that she will more than likely pay off any outstanding balance in full each month, she will never pay any interest charges and she will never make them any money.

........apart from the 2% 'merchant fee'' paid to credit card companies by retailers on all transactions.

Zebedee69

Thomas_Crown wrote: »

........apart from the 2% 'merchant fee'' paid to credit card companies by retailers on all transactions.

They still wont make any money out of him, thats why he got a turn down. Thats why Egg chucked 150000 odd customers away.

Also its not a 2% fee everywhere.

999 Is a bad record to be honest (most companies will assume they wont make money out of you) if I get mine to about 850 il be happy (im 775 at moment)

Also its true that the CRA score doesnt mean much anyway:rolleyes:

ben.bayliss

Jolly_Roger wrote: »

My wife has a credit rating of 999, which is one point shy of perfection

As others have done, I'll stop you right there.

She doesn't have a rating of 999, nor does anyone else, and nor can there be 'perfection'. There is no such thing as a single credit rating. Every lender will calculate their own 'score' when assessing an application, and what one lender likes, another won't.

By all means, check your credit reports for accuracy every year or so, but don't pay any attention to your supposed 'score' (tbh I don't think it's worth paying for those premium services - just get your £2 report). All you can do is ensure that the information on the report is accurate - the rest is up to the lender to decide.

wymondham

I think it's possible to have a rating too high these days - it shows itself especially with Credit Card companies as a good credit rating says to them you pay off the amount each month and don't pay interest (ie pay them interest)...

What is the best way to 'dent' your rating if it's at 999 ?????