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I have a good credit rating and no loans or other cards but I've been turned for a credit card twice

by rfmk 02 May 2009 |

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I've checked my credit rating on Experian and it's about 2 points below Excellent. The only credit I have at the moment is £300 remaining on my sofa (2 years at 0% interest) and a £1000 overdraft available (not used at the moment). I've had a personal loan and credit cards in the past and have never missed a payment.

I've applied twice over the last year for an Amex cashback card but I've been declined both times.

Is there anything I can do?

I want a card for emergencies but don't want to keep applying and getting turned down.

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vincerob posted
this is becourse you have no credit try applying with the bank your banking with for there own credit card once you have a credit card or a loan it wont be hard to get the next one
Posted on 02 May 2009 | Love 0 loves Report
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MikeGG1 posted
An Amex card is not accepted everywhere so it wouldn't be an ideal card for emergencies. Also, after the initial period, the cashback rate is dependent on your spend, so again there are plenty of better cashbacks for low spend.
As vincerob has already said, get one from your own bank.
Posted on 02 May 2009 | Love 0 loves Report
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ThatLindseyGuy posted
RFMK>> Could be a lot of possible reasons for your rejection here:
Firstly, you don't have a lot of credit (as vincerob says above). What you do have -- mainly the bank overdraft -- is largely undrawn which makes lenders nervous because of the perceived risk that should an emergency come up, you'll be tempted to use the entire overdraft facility with no defined strategy for paying it back, possibly leading to problems later on.
Your credit record gives more weight to recent history than older items, so the fact that your personal loans and credit cards were paid off some time ago may not be as much help as you might think. Additionally, lenders prefer to see current/recent use and repayment of credit cards and/or personal loans rather than bank overdrafts when looking at your credit history becuase they indicate that the applicant is used to making regular discretionary payments to service their debts. As vincerob and MikeGG1 say, it would be best if you have a credit card to use for everyday spending to help build up your credit history.
Rather than applying straight to your own bank though, i'd advise you apply to one of the cards specifically targeted at those wishing to build up their credit history. These include Barclaycard Initial, Capital One Classic, Vanquis and Aqua. These credit cards tend to have the best chance of being accepted.
These cards generally have expensive APRs of between 25% and 40% and are therefore not to be used for medium- to long-term borrowing, but rather for short-term cash flow management. This means you should buy everyday items (groceries, fuel etc.) on them and pay them off in full when the statement arrives to avoid any interest charges. Building up a history of using and paying off your credit card is one of the best ways of strengthening your credit status.
The reason for not going straight to your bank for a card is that in the majority of cases, the credit card division and banking divisions of many banks are siloed in different subsidiary companies within the same group, which are restricted as to the amount of customer information they can transfer between each other due to both data protection and competition legislation.
This means that when you apply to your bank for a credit card they will normally have to carry out the same generic credit checks on you as they would for any other applicant, meaning that there's often no advantage in applying to your own bank instead of another provider.
Regarding the Amex Platinum Cashback card in particular: this card is generally targeted at high earners with high disposable income who are most likely to use the card frequently and generate lots of merchant fee revenue for Amex. Therefore this product has a much higher rejection rate than many other cards.
Posted on 03 May 2009 | Love 2 loves Report
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vindoloo1 posted
Yea, I have a good credit rating and have applied for an Amex Plat card also, only two days ago!! But it came up as pending so I think I have been declined, the reasons I think is that either I have been classed as a pauper, or because the last search on my credit file was only 14 days ago of which although successful, I have been told that one should wait at least two months between new seaches being made. Also I have worked out that I am only using 10% of my availiable credit in any case so they may think that why should I need more? fmk, were you declined immediately or was it a pending decision?
Posted on 03 May 2009 | Love 0 loves Report
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rfmk posted
vindoloo1 - mine came up as pending when I filled in the application online, then I got a letter about 1 week later saying I'd been declined.
Posted on 04 May 2009 | Love 0 loves Report
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Karada_uk posted
The thing you have to remember is that everything is done by credit scoring and if you have no debt, no cards and only one bank account, "Gypsy Rose Experian" has no way of interpreting the tea-leaves to see if you are a good risk. So you get declined. Ideally you need to get a card and use it and pay it off each month so it shows that you are using it to no more than 60% of the limit but it remains under control.
The other way to build your credit rating is to use Cross-Firing. This needs perfect control and careful watching of the diary. Get one card and use it. In the 2nd month pay it off, then use it again and the following month pay it off. Do not use more than 50-60% of your limit. Then apply for another card. This next bit will cost you some money so watch how much you put on your card. Draw cash from your second card and pay the first and put your monthly payment into the second card. This way you have two cards being used and paid off each month. Just watch the dates and plan carefully. Then you can add a third and so on. Keep it under control and you will build your credit rating at a cost of about 2.5% per month, possibly worth it. You can do it with bank accounts as well but watch out for HSBC who keep an eye on people using the technique and are likely to close your account without warning. It is much quicker to build credit with bank accounts because the money circulates much faster. Just don't use the same amounts for each transaction in or out.
Posted on 04 May 2009 | Love 0 loves Report
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ckm4328 posted
rfmk - You don't say how old you are and this can have a significant impact regardless of your credit score.
I have also been declined by AMEX before but never for any other type of credit I have credit cards, loans etc and very high score.
I looked into the matter and understand that AMEX have a target market that they aim at. I understand that younger applicants are not within that market.
It may be that you will be refused regardless of your score unless you have a very significant level of income.
My impression is that they only really want to lend to those over 30.
Posted on 05 May 2009 | Love 1 love Report
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vindoloo1 posted
Rfmk, thanks, looks like I too am stuffed as regards Amex then, if pending means being declined on this particulaar card. very interesting points from Karada and Ckm. only just joined here, great site!!
Posted on 06 May 2009 | Love 0 loves Report

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