Credit declined, good credit score - when to try again?
Discussion
I was declined for an interest free credit purchase over Christmas of around £1000 over a year. I had the cash but didn't want to spend it at once.
I bought a car on an HP in October, the total amount being about 70% of my annual salary, but over four years between two, minus the balloon payment isn't a big thing. I think this is what caused me to be declined for credit, and Experian see this as a potential risk factor despite my credit score being mid 900s, no defaults ever etc.
The strange thing was that no search was performed at Experian, and I've never been turned down for any credit product before.
How long do I need to wait before applying again for something? Does a credit agreement need to run for a set number of months before it's considered stable or anything?
Thanks
I bought a car on an HP in October, the total amount being about 70% of my annual salary, but over four years between two, minus the balloon payment isn't a big thing. I think this is what caused me to be declined for credit, and Experian see this as a potential risk factor despite my credit score being mid 900s, no defaults ever etc.
The strange thing was that no search was performed at Experian, and I've never been turned down for any credit product before.
How long do I need to wait before applying again for something? Does a credit agreement need to run for a set number of months before it's considered stable or anything?
Thanks
How long is a piece of string?
Every credit provider has their own internal credit scoring system and only glean from your credit file the information they require for that application.
The credit file providers have done a great job in creating an industry out of paranoia of identity fraud and how good your credit score is!
For reference, it's often harder to secure unsecured credit such as loans, interest free finance or credit cards etc than it is to get £20k finance secured on a car or £200k mortgage secured on a house.
Failing to be accepted for the interest finance bears no reflection on your credit worthiness, just how picky that finance provider is. It could be done to not being on the electoral roll, patchy address history, high debt to income ratio or anything else at all.
A lot of providers have default decline responses to anyone who has been declined who reapplies within a short period of time so I wouldn't apply again for at least six to 12 months to that provider...
Every credit provider has their own internal credit scoring system and only glean from your credit file the information they require for that application.
The credit file providers have done a great job in creating an industry out of paranoia of identity fraud and how good your credit score is!
For reference, it's often harder to secure unsecured credit such as loans, interest free finance or credit cards etc than it is to get £20k finance secured on a car or £200k mortgage secured on a house.
Failing to be accepted for the interest finance bears no reflection on your credit worthiness, just how picky that finance provider is. It could be done to not being on the electoral roll, patchy address history, high debt to income ratio or anything else at all.
A lot of providers have default decline responses to anyone who has been declined who reapplies within a short period of time so I wouldn't apply again for at least six to 12 months to that provider...
The poster above has covered most things, but it's worth adding that, well firstly any score you can get is bull s
t, and secondly I would guess with such a large HP outstanding you might have fallen foul of an affordability calculator and you can have the finest history in the world, if you cannot afford the new repayments on top of your existing ones with enough to a margin for normal lifestyle expenses and a safety margin, they won't lend you anymore money.
The system we used to work to was never to allow anyone to borrow more than 60% of their income in terms of total credit and living repayments - the theory being that most peoples income matched their lifestyle.
for example, if you earned £2000 a month after tax, your rent/mortgage was £600, you had a Car costing you £300 a month, a credit card with a minimum payment of £100 you would be at 50% so you could afford another £200 a month - leaving you with 40% of your income for the intangibles like food, fuel, bill and enjoying yourself - but that was only the starting point, we had it include factors like if they had children and their age etc.
t, and secondly I would guess with such a large HP outstanding you might have fallen foul of an affordability calculator and you can have the finest history in the world, if you cannot afford the new repayments on top of your existing ones with enough to a margin for normal lifestyle expenses and a safety margin, they won't lend you anymore money. The system we used to work to was never to allow anyone to borrow more than 60% of their income in terms of total credit and living repayments - the theory being that most peoples income matched their lifestyle.
for example, if you earned £2000 a month after tax, your rent/mortgage was £600, you had a Car costing you £300 a month, a credit card with a minimum payment of £100 you would be at 50% so you could afford another £200 a month - leaving you with 40% of your income for the intangibles like food, fuel, bill and enjoying yourself - but that was only the starting point, we had it include factors like if they had children and their age etc.
The reason no search was recorded at Experian was possibly because the lender used Call Credit or Equifax, they should cross-fertilise but don't always.
Worth getting the reports from all 3 (Call Credit/Noddle has been most successful and accurate for me as a single resource). I often see inconsistencies when advising mortgage clients.
I had trouble getting a new balance transfer card for a while a year or so ago due to the high level of credit available to me - not the level of credit I actually had used!! A couple of months later I bought a £20k car on finance no problem (confirming Sarnie's point).
Got any cards with big available limits kicking around?
Worth getting the reports from all 3 (Call Credit/Noddle has been most successful and accurate for me as a single resource). I often see inconsistencies when advising mortgage clients.
I had trouble getting a new balance transfer card for a while a year or so ago due to the high level of credit available to me - not the level of credit I actually had used!! A couple of months later I bought a £20k car on finance no problem (confirming Sarnie's point).
Got any cards with big available limits kicking around?
pacoryan said:
The reason no search was recorded at Experian was possibly because the lender used Call Credit or Equifax, they should cross-fertilise but don't always.
Worth getting the reports from all 3 (Call Credit/Noddle has been most successful and accurate for me as a single resource). I often see inconsistencies when advising mortgage clients.
I had trouble getting a new balance transfer card for a while a year or so ago due to the high level of credit available to me - not the level of credit I actually had used!! A couple of months later I bought a £20k car on finance no problem (confirming Sarnie's point).
Got any cards with big available limits kicking around?
I've got a CC with about 20% of the limit used at the time I applied - needed to bump it up temporarily in around July to cover work expenses. Is it worth dropping it down or would the increase then decrease look worst?Worth getting the reports from all 3 (Call Credit/Noddle has been most successful and accurate for me as a single resource). I often see inconsistencies when advising mortgage clients.
I had trouble getting a new balance transfer card for a while a year or so ago due to the high level of credit available to me - not the level of credit I actually had used!! A couple of months later I bought a £20k car on finance no problem (confirming Sarnie's point).
Got any cards with big available limits kicking around?
Call Credit is a good shout, thanks for that. I went to Experian and Equifax and neither had a search registered.
P-Jay - regarding affordability, do they take into account spouse income? Our mortgage is in joint names so files should be linked, but the car is in mine.
AlasdairMc said:
I've got a CC with about 20% of the limit used at the time I applied - needed to bump it up temporarily in around July to cover work expenses. Is it worth dropping it down or would the increase then decrease look worst?
If that's the only one you have I'd be surprised if it is a problem unless the available limit is huge. For context I had 5 cards and £45k available credit, so you can understand why a lender would query my motivation for wanting more!This credit score system is just pathetic, i wanted £15k to put towards my new car i already had £30k in my bank. But the rate the banks wanted was to high so i applied to santander who where offering £15k at 4.9% apr which is a fantastic rate, guess what They declined me!! i have cash in the bank, i own property outright worth in excess of £800k and have credit cards that are paid in full every month by DD!! I just don't understand.
i paid for a experian check and the gave me a score risk of 725 witch is very bad. dont understand why!! never been in debt! or bankrupt & also i am a Barclay's premier account holder. The system is rediculas .
i paid for a experian check and the gave me a score risk of 725 witch is very bad. dont understand why!! never been in debt! or bankrupt & also i am a Barclay's premier account holder. The system is rediculas .
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