excellent credit score yet cant now get finance

[manracer]

Im hoping this is covid related and im not on my own here.

I have done 2 soft searches for credit card BT's and both were declined.

I have a 999 rating, savings, decent job, not missed a single payment on any loan or credit card in the last 8 years, and pre-covid i had no issues with finance. Recently Amex upped my limit from £20k to £50k, with a balance that is cleared each month.

The only thing i can think of is that im self employed (ltd company director) and im sure i read somewhere that due to the impact of covid, the banks had pretty much shut shop for most people.

Anyone else had a similar experience?

I actually sold my tesla when lockdown started, i didnt need it and managed to walk away after 9 months net even.

Now im worrying as i may want to purchase a car in the next few months and have been saving a nice deposit, but would of wanted a £10k bank loan, though after this today, im not sure i would get one.

MSE credit club say i have a 90% chance of getting both of the cards that I was declined for.

[Terminator X]

Oh dear, if you are unable to self finance 10 cars for your "stable" I fear this thread will end badly for you

TX.

[manracer]

Terminator X said:

Oh dear, if you are unable to self finance 10 cars for your "stable" I fear this thread will end badly for you

TX.

Haha. Id rather finance at 2.8% the car, than use savings.

The credit card BT is always at 0%. Ive done very well to reduce my debt from £20k to £5k in 2 years, so any negative comments from people are water off a ducks back.

[BurtonLazars]

Can I just confirm I’ve understood this correctly - you’re £5K in debt, you’ve saved a ‘nice’ deposit for a car, you’d need a £10K loan, you’ve got a £50K limit on your credit card?

Do you keep separate company and personal accounts? Is the Amex your personal card or the business card?

[manracer]

BurtonLazars said:

Can I just confirm I’ve understood this correctly - you’re £5K in debt, you’ve saved a ‘nice’ deposit for a car, you’d need a £10K loan, you’ve got a £50K limit on your credit card?

Do you keep separate company and personal accounts? Is the Amex your personal card or the business card?

Yes to all the above. 5k debt on one card, at 0%. Paying around £700 a month currently. The credit limit on this card is 22k.

I've saved 4k since lockdown towards a car. Was thinking of buying instead of leasing (as I have done a few times in the past. So would be 5k deposit and 10k loan for a 15k car, or thereabouts.

Amex was only mentioned to provide some context that I don't utilise credit limits.

I do have separate business and personal accounts.

Amex is personal card, used only to build Avios.

Edited by manracer on Wednesday 2nd September 13:12

[romeodelta]

You already have access to too much credit.

Start by reducing some of the limits.

[CRA1G]

Have you had a Bounce Back Loan...?

[deckster]

romeodelta said:

You already have access to too much credit.

Start by reducing some of the limits.

^^^ This, I'd have said. Lenders will be nervous about the possibility of you maxing out the £72k you have access to.

[manracer]

CRA1G said:

Have you had a Bounce Back Loan...?

No i have not, i didnt need one as i was very fortunate to have work throughout lockdown.

[BurtonLazars]

romeodelta said:

You already have access to too much credit.

Whether or not that’s what’s affecting this application decision, but I suspect it might, I have to agree with RD — think about it from a lender’s perspective: you could get a £10K loan from them and then the next day splash out on £50K unsecured lending with no checks required.

[manracer]

deckster said:

romeodelta said:

You already have access to too much credit.

Start by reducing some of the limits.

^^^ This, I'd have said. Lenders will be nervous about the possibility of you maxing out the £72k you have access to.

OK, that seems logical, i will start by reducing limits and perhaps try again in a few months

[Nickbrapp]

You’re not a credit card lenders ideal customer

[bigandclever]

Is “BT” balance transfer?

[manracer]

bigandclever said:

Is “BT” balance transfer?

Yes, apologies

[bigandclever]

manracer said:

bigandclever said:

Is “BT” balance transfer?

Yes, apologies

Doesn’t bother me

But from a new credit card provider’s perspective, you’re notionally asking for a £50k facility, with a history that says you don’t have problems managing your credit, or to put another way, you’re unlikely to make them any money.

Amex upped your limit because they want you to spend, spend, spend. If you don’t need it, get it reduced. It’s nice to have, obvs, but as you’re finding it sort of ties you in.

Also, a balance transfer isn’t the same as the loan you’ll actually be going for, so you’re comparing apples with pears anyway.

[Dr Jekyll]

I've heard that have a credit card balance of a high proportion of your credit limit is bad for your credit score, so I assumed the higher the credit limit the better. What's the optimum level for your credit limit?
Three or four times what you expect the balance to hit?

[manracer]

ive started the process of closing all credit accounts i have but dont use.

I have moved the balance to another card i had (but was unaware of) that has 20 month BT 0% so the CC issue has been resolved.

The amex card used to have no defined limit,but when i charged for better avios bonus, it appears the limit was applied. im going to reduce that too.

I see the logic - i have the option to max cards, even though i wont and that limits me elsewhere. I also get it that a loan is very different to a CC.

Thanks for everyone's help.

[Simpo Two]

deckster said:

Lenders will be nervous about the possibility of you maxing out the £72k you have access to.

bigandclever said:

...with a history that says you don’t have problems managing your credit, or to put another way, you’re unlikely to make them any money

Both of those make sense, yet are opposites.

Either way, it rather makes a mockery of the 'credit score' concept. If the ads were believed, 999 is Nirvana and you can have anything you want.

[PixelpeepZ4]

credit score is one thing, these 'clear score' ratings are quite another.

clear score said:

Making an application for lending from a third party
Third party lenders will use their own criteria in making decisions about you. Any decisions you make on the basis of your credit score or credit report, or any other information we provide or make available to you, are purely your own choice.

that's right, the 'score' these companies give you mean jack st to any other lender.