Credit History?

Question

Why is it that if you you get turned down for a credit card or loan or whatever, it brings down your credit rating?

Just been looking into getting a credit card, just for emergencies due my bank having IT problems and couldnt access my money.
My credit history is flawless and I dont want that ruined.
Why does this happen and how can you prevent it? I realise I could probably get 99% of cards, but what happens if I get turned down for one. How do I know what the criteria are?

I havent applied for any cards yet. I was just wondering why it happens?

Oh and I dont need the money. It so if my bank cocks up again I still have access to money.

Answer 1

The fact that you get turned down for credit, is not recorded at the UK Credit Reference Agencies. It is the search requests that the company you are applying with, that is recorded. Thus, if you make several applications within a short time frame, this is likely to result in a further application being declined. The number of applications and the time-frame these are measured in, will vary with each lender. This particular check is primarily to prevent fraud. The criteria used to approve lending, are many and complex. They are also most usually done by a computer first and only in exceptional circumstances is a human decision necessary! The company I work for are constantly changing the business rules used to determine whether or not to approve lending. If you have a flawless credit history, and do not intend to apply for several cards in a short time period then you don't really need to worry.

Answer 2

By day i am a credit mngr my job is to do eaxctly that asses an application and aprove or decline. It is nessicary that you credit history be checked we do this online everytime a company comfirms your credit history the company name and date the enquiry was made will apper for 5 years on your credit file.

Yet may I remind you there is no such thing as a credit "rateing". Your credit worthiness is not assesed by rating unless you are a comercial debtor. As a consumer we base the dicission fo your history in the following areas
- Do you have a defult on your report?
- Do you have record of any court proceedings against you eg summons or judgment as this stays on your record for up to 12 years.
- Assesment of your enquiry history.
If you are declined for a card this dose not show on your consumer history yet as above it will only show the date and company whom enquired. Again if you are approved your report dose not show you are approved only again the company and date enquired.
How dose this effect you?, in all honesty I have never declind a person or comapny on the enquiry history, Yet be warned should you apply for say 10 cards with in 8 weeks it will show that all these companys have enquired on your behalf. The application assor will then question the reason for this. Are you applying for funds you are unable to pay back, is there a risk associated with this?. What has been the need to apply so many times have you been declined?, we are unaware so in that case i would not take the risk, and i would decline you on those grounds.

The biggist factor in approval is your age if you are 20 do not write down you want $10k limit I can garentee you will be declined yet if you apply for a $2000 limit i would have no issue approveing you as that would be low risk and a mangable loss.

My job also includes taking ppl to court, repossesing there furniture, car ect when they dont pay and yes this can be something as small as a store card debt you have let go. Use credit wisely be sure you get a good deal on your inteest rates and dont fall for the reward points this is only to reel you in. Try to keep your credit with 1 or 2 institutions as you can quickly build a good customer reputation and been seen as low risk for further loans, Apply with someone you dont know they dont know your history like say your bank dose, Bad credit can ruin your life tread carfully.

In regards to Criteria
- Income usualy must exceed $25,000pa before tax if less ask for less credit eg $15,000 pa = $1000 risk (you will ve able to apply for an increase after 6 months)
-- Job Stability - Dont apply unless you have held emplyment for 6 consecutive months if this has been with more than one company you must provide checkable refs the HR departments number should be used
- Age the younger you are the less you should ask for
- Future income stability if you are a casual employee note on the application this is ongoing casual work with ongoing stability otherwise fill in as applys
- refs - Tell you boss to expet the call from the bank you may need to fill in a privacy disclousre form at work this is your responsibility. otherwise ask for a statement of earnings and attach to your credit Ap
- Get your Credit report before they do. get a copy of your credit report this is usally free you just need to fill in a form. In case anything happend you have proof that your report was clear & you get all the info they do so you can see your history for yourself.
- Dont leave blanks on the form the less time needed, to be processed the more lilky you will not be declined as an application can be declined if there is lack of info.
Good Luck (pls excuse the spelling, I dont have time to go over this)

Answer 3

You can generally make 3 or so applications every 6 months.

The reason you get penalised for more, is that to lenders it looks like you are applying for large amounts of credit, and the more you borrow the less likely you are going to be able to pay it back!

If you get turned down for 1 card, its not going to affect anything. Just make sure you don't apply for more than 3 or so if you keep getting turned down. Wait 6 months and then try again.

Answer 4

you would be able to desire to start someplace, so right here;s what to do.... a million. positioned some funds interior the economic enterprise, and build it up... 2. once you get to 500 funds circulate into the economic enterprise and borrow $one hundred utilising the $500 on deposit as collateral. * submit to in concepts you won't be able to take any of the $500 until the internal maximum loan is paid. 3. repay the internal maximum loan in 8 mo. not greater or no much less...it particularly is the era wherein it takes to checklist your historical past of paying back a private loan. pay greater yet do not pay it off any quicker. 4. verify your mail field, you will now get carry of a ton of direct mail asking you to notice for credit taking part in cards, and your hand will become tired of writing... 5. be constructive to confirm each and all of the literature and purely take the credit that has 0% for a million 365 days or based on your credit, one with a very very low fee.... 6. continuously pay on time and in no way borrow needlessly.

Answer 5

Stop applying for multiple cards ...

Every time you apply, they assume you need extra money .. and (of course) they never want to lend money to people who actually NEED it !

Also, there are some peopole who play the 'Interest Free' game (i.e. move their money to a new card every time their current card reaches the end of the interest free period) .. again, they are NOT interested in some-one who never pays any interest :-)

So the more you ask, the less you get ..