Help with credit rating...

groggles11

Just been rejected for my 2nd credit card there today lads. I've a great salary and to my knowledge have never been late paying any bills either in Uni or since I've begun work. Just wondering if there are any obvious reasons as to why I've been rejected (currently awaiting my credit file which I applied for just now). I once missed my rent direct debit by a day, but I paid it in full the following day. I've paid all of my phone bills on time, one bill made me go into over draft by €4 on my current account but that was for a day only. I have a significant savings to my name (compared to those in my line of work and experience) outside of my current account and tend to transfer my current account balance to that account after every pay day (I try to live on my wages and save an excess if you get me).

Any help with this or even reversing any bad credit history I may have? Would gaining a small loan and paying it back on time help me get a credit card? Not that I need a small loan per se but would it prove myself to be a reliable borrower?

Suppose nothing will be clear about my problems till I get the credit file...but I can't stress enough that I have significant savings (albeit away from my current account) and a good income from my work.

dobsdave

groggles11 wrote: »

Just been rejected for my 2nd credit card there today lads. I've a great salary and to my knowledge have never been late paying any bills either in Uni or since I've begun work. Just wondering if there are any obvious reasons as to why I've been rejected (currently awaiting my credit file which I applied for just now). I once missed my rent direct debit by a day, but I paid it in full the following day. I've paid all of my phone bills on time, one bill made me go into over draft by €4 on my current account but that was for a day only. I have a significant savings to my name (compared to those in my line of work and experience) outside of my current account and tend to transfer my current account balance to that account after every pay day (I try to live on my wages and save an excess if you get me).

Any help with this or even reversing any bad credit history I may have? Would gaining a small loan and paying it back on time help me get a credit card? Not that I need a small loan per se but would it prove myself to be a reliable borrower?

Suppose nothing will be clear about my problems till I get the credit file...but I can't stress enough that I have significant savings (albeit away from my current account) and a good income from my work.

I wouldn't worry about going overdrawn on 4 euro, or missing your rent by one day


How long have you been working on a salary?
Do you have any history of loans or even an approved ovedraft?
How long between applying for the two credit cards? (and was one of them Tesco?)

groggles11

dobsdave wrote: »

I wouldn't worry about going overdrawn on 4 euro, or missing your rent by one day


How long have you been working on a salary?
Do you have any history of loans or even an approved ovedraft?
How long between applying for the two credit cards? (and was one of them Tesco?)

2nd year working full time after college. One was Tesco and the other was RyanAir. My job is a temporary one as I'm a teacher and there are few permanent posts, although my salary is guarenteed till next August and in all probability I'd be working again next year if you get me

maximoose

Your overdraft isn't reflected on the ICB so I wouldn't worry about that.

I'd put it down to the fact that most credit institutions are being stringent buggers now and have tightened up all lending criteria (and its about bloody time). Sometimes having no trace on the ICB goes against you, strange enough though if you have a guaranteed salary.

I had trouble myself getting a credit card recently (I have had 3 small loans in the last 4 years all paid back without a blip, nothing else on ICB and guaranteed salary), just shop around!

groggles11

Where did you finally get sorted Maximoose?

maximoose

Tesco I'm afraid! Try MBNA, got offered one from them too but opted for Tesco in the end (I'm a clubcard whore)

chris85

maximoose wrote: »

Your overdraft isn't reflected on the ICB so I wouldn't worry about that.

I'd put it down to the fact that most credit institutions are being stringent buggers now and have tightened up all lending criteria (and its about bloody time). Sometimes having no trace on the ICB goes against you, strange enough though if you have a guaranteed salary.

I had trouble myself getting a credit card recently (I have had 3 small loans in the last 4 years all paid back without a blip, nothing else on ICB and guaranteed salary), just shop around!

He has guaranteed salary till next August. After that its unknown and the bank may be of the view that he may not have employment after that and may use the credit to fund living expenses and wouldnt be able to pay it back.

Pythia

A lot of banks will have rules like must be working continuously for at least 3 years or must earn >30k etc. You may be ruled out for reasons like this.

Also, why not get a visa debit? You can use it basically anywhere a visa credit card is accepted.

Procasinator

Credit cards are funny business. I was unable to get a credit card limit increase (from €500 card) because I was too good at paying back the balance - they were not making any money off me. If I wanted an increase, I had to prove I needed it, which meant spending more and not paying back the full amount every month.

In other words, while they probably will make sure someone is not high risk, but also on the other hand someone who will always pays back the balance won't make them any money, it not actually making a loss.

chris85

Procasinator wrote: »

Credit cards are funny business. I was unable to get a credit card limit increase (from €500 card) because I was too good at paying back the balance - they were not making any money off me. If I wanted an increase, I had to prove I needed it, which meant spending more and not paying back the full amount every month.

In other words, while they probably will make sure someone is not high risk, but also on the other hand someone who will always pays back the balance won't make them any money, it not actually making a loss.

They make money on charges on transactions to the retailer itself. Not all their income comes from interest but obviously this is art of it.

A high earner, low risk applicant is good because they spend a lot so the credit card company earns money on transaction charges to the retailer and the credit card company's cost to recover the balance is nothing as always pay back.

Procasinator

chris85 wrote: »

They make money on charges on transactions to the retailer itself. Not all their income comes from interest but obviously this is art of it.

True, each transaction charge is usually divided between 2+ parties: the retailers bank for which they have a merchant account, the issuing bank and the cards network (Visa, e.t.c.).

Low spenders probably won't cover their costs or a not worth the risk (even if not paying back risk is low, other risks like fraud come into play), particularly if they don't occur other charges. Obviously, there is the opportunity cost each time the issuing bank releases funds (maybe could make more money on a different market).