To ask why I am constantly turned down for credit?

[whiskyowl]

OK, let me preface this by saying this is the very definition of a First World Problem. I have been really abjectly poor in my life (homeless) and I know how lucky I am to be able to type every word of this post. so please don't think I'm stealth boasting or anything like that. The problem I'm about to describe is, at best, an inconvenience and a bit of a social embarrassment. I fully realise that, compared to many families, we are super lucky.

I've just been turned down for credit for a kitchen in Ikea. This happened the last time DH and I applied for credit a few years ago, for a mobile phone contract. We had an almighty battle to get any company to take us on! It is inconvenient and a headache when this happens. It would be really useful to get this credit, because we're spending a lot on building work at the moment, and it means we'd have more readily available money for our contingency.

We are good with money and scared of debt. We have a good credit score on Experian - 999/999. We are lucky enough to be in a position to pay every bill on time, including all credit cards. We have never been late for a mortgage repayment. We have savings. (They are locked up for a bit, which is also why this 0% credit deal would be really useful). I have never had CCJs, or any bills that are outstanding (as far as I know).

Yet DH and I really struggle to get credit. We had to fight for days to get a mobile contract for him (which is why I know my Experian score - I had to send it to them as proof) and now this Ikea problem looks similar. It takes days and a big fight for us to get credit and it's super-embarrassing in store when it happens.

Please, oh wise Mumsnetters, why is this happening and what can I do in future to stop it? Is there something on my record I am unaware of, and if there is, how do I find and correct it?

TIA for advice!

@ReallyAIBU
Thanks for clearing that up. I stand corrected. I'll go back to my ark now...

"Previously, everyone under the same roof shared a credit history. You can imagine the problems this must have caused. Unruly previous tenants affecting your ability to get a phone contract or non-dependant children racking up bad debt under your roof!
Those days are long gone, there’s no such thing as a blacklist and each file should be based on the individual alone.
Provided that you’re not financially associated in any way and you’ve never had any joint accounts or debts, your credit history will be entirely separate from anyone else’s, whether you live with them or not."

We have two credit cards, which we use regularly. The balance is paid off at the end of every month.

There's your problem, your creditors aren't making any money out of you therefore there's no incitement for people to lend to you.

That’s not it. I got an Ikea/Ikano credit line a few months ago and I also pay off everything in full each month.

No idea op. Call experian?

fellia - oh no, how awful for you! I am worried it could be something like that because I literally can't think of anything I know about that would cause this.

flowers - DH is a higher rate taxpayer and the amount we want to borrow is comparatively modest, so I don't think it's an affordability issue. We have low outgoings as our mortgage is small and we aren't servicing any debt.

bunbun - off to check those now, thanks for the tip!!

fluffy - we rarely apply for credit, so there isn't a big list on there or anything.

I wonder if it's paying off everything in full that could be the issue?!?!

meg - no, neither of us changed names on marriage - we both have the same name we have had since birth.

Your credit score means nothing to the bank lending the money. The bank will have its own criteria to decide whether or not to lend you money. After the credit crunch a lot of banks have tightened up their lending conditions to avoid ‘risky’ lending.

I agree with the other posters that it’s likely to be affordability that’s an issue. Assume you’ve had to come income and expenditure assessments? Could there be anything in those that may suggest you can’t afford the loan?

I'd recommend checking on Noddle (it's free) and making sure there's no fraud/CIFAS notes on there. Probably not or you'd have noticed but still worth checking. Otherwise, could it be income?

Whoever above said "you have to have credit, to get credit" is dead on the money.

For years, I never had a credit card, had a Pay as you go mobile, never had any kind of credit account anywhere and guess what happened when I tried to take out a pay monthly mobile in a couple of places? Rejected!

Having a perfect credit score can actually be a hindrance. I found that when my credit score was middling, I stood a far better chance of getting accepted for other credit related things than when it when it looked amazing. If you look perfect, then they kind of start wondering what's wrong? Like, why is it perfect? Why don't you have anything outstanding? Why aren't you paying anything off? I know that might sound really stupid, but that's the way that finance seems to work now - it's normal for people to be paying things off now, and making REGULAR payments towards it, than it is for people to have fully paid off everything and have a perfect credit score. It's normal for people to have missed one payment over a period of a few years, it's show's that you're a normal person. It's normal to have a credit card and NOT pay the full balance off every month.

I have a finance agreement on a car, having that helped me to get a credit card (something I'd never had before). I've had jobs where they do credit checks and they admitted during those checks that they find it suspicious if people don't have debt and/or a perfect credit score.

While I've paid off my credit card, I'm going to keep it and just use it for petrol. It proves I have credit. If you have a credit card, you need to use it sometimes. Without that, no-one will take a risk on you.

You need to find out what credit reference agencies ikea and the mobile provider are using and then get your report from them. Your experian report may be clear but your reports with the other agencies may not be. Or it could be your address. Bad credit from previous occupants shouldn't affect the address but fraud will. You may have fraud markers on your address, I'm not sure how you check that or resolve it though. Check with the fraud prevention agency. Also are you applying jointly, have you seen your dh's credit report, can you be sure his is clean.

I had this for a while when I moved house. Think it was a combination of me having moved a few times in the space of a couple of years and the fact that I had a ‘weird’ address which the credit agencies sometimes struggled to find on their systems. It doesn’t sound like either of those apply to you, though.

I’m by no means an expert and of course you should be sceptical of anything you read on a forum when it comes to finances. But my understanding (from investigating my own situation a bit) is that they care more about what proportion of the credit available you typically use. So having one credit card with a limit of 1000 but maxing it out every month is worse than having a credit limit of 4000 (on one or more cards) but where you normally only ever use 1000 of that. Someone please correct me if I’m wrong!

Sometimes they really are just weird, though. My dad is very well off and normally has no problems getting credit, but there’s one credit card company that just will not accept him for some reason. They all have their own criteria for what they’re looking for and it sometimes has very little to do with how healthy your finances are.

Lived in this house 5 years (paid cash due to house sell where mortgage had finished) don't have credit card as pay cash or debit card. Have enough money in the bank that would enable me to cash buy another house but I'm also turned down for credit to places that offer interest free credit. I think the credit world is crazy. People with debts are given more .People without don't.

1. Your credit score means nothing. Lenders do not see this.

1. Have you checked your dh's report? If he may have bad credit like a default or late payments. If you have a joint account then this will impact you.

1. Check your Experian report if you still have it. Especially the linked address parts. If not sign up to check my file.

1. Have you ever been a victim of fraud?

1. Experian or any Credit Reference Agency do not make the lending decision. The company do so they should be able to tell you the reason.

We've had an absolute nightmare with our house and getting credit. And it was the most stupid thing imaginable - the owners of the house before us used a name, not the number. DH and I have never had a bad debt, good level of income but were turned down for nearly everything we applied for - with great embarassment on occasion. Then a hallelujah moment came and I applied for a credit card online using the house name - bingo!! So now we have to use the full address even though we've not used the house name since moving in 20 years ago (all the other houses are numbered, it's a small cul de sac and it was a naff house name so we dropped it).
It's often something really simple - or not having any credit record at all can be as damaging as a bad one.

I was once turned down out of the blue for a store card because apparently I had too many store cards (never used them, except to get sign up discounts). Too many cards can make them refuse. Do you have lots of store cards as well as credit cards?

They will look at credit available vs. income and long term ability to pay.

But yes, I would say, leaving a little balance on the cards is a good move. You'll likely soon find your balanace increases without you asking and then you'll probably pass the checks. Most stupid system ever, but there you go.

Lived in this house 5 years (paid cash due to house sell where mortgage had finished) don't have credit card as pay cash or debit card. Have enough money in the bank that would enable me to cash buy another house but I'm also turned down for credit to places that offer interest free credit. I think the credit world is crazy. People with debts are given more .People without don't.

Doesn't matter how much cash you have. This won't show on a credit report and I've never seen an application for credit that asks this.

It's your account and credit history and also income that's important.

It's a crazy immoral world. Be an A* citizen who's paid off your mortgage, paid credit card in full, never been in debt and you are refused.

Be some optimist who wants a loan they haven't got the income to maintain and the banks fall over to give you money. 2008 rings bells on that - sub prime loans to people who should never have been loaned money to in the first place.....

I've already done an Experian Credit Check. Experian are the credit checking agency that Ikano use. I know this because I can see their search from today on the report! The whole report is absolutely fine. We've never been late with a single payment for anything, and this is all down there.

I've just done a Noddle check. Credit rating is 659 or 5/5. There are no CIFAS warnings on the file, no bankruptcies, no insolvencies.

It's definitely not affordability, either. The amount we are looking to borrow is small compared to income and we have a very low mortgage and no debts to service each month.

But Op, you say ''constantly turned down for credit'' which implies you must apply numerous times to be turned down constantly...

Sorry, my bad. "Constantly" is an exaggeration. We've been turned down for credit twice since 2015, but we've only applied twice - once for a mobile phone contract, and today.

They may look at your disposable income and decide it is not high enough. Also every application you have been declined leaves a footprint on your credit rating and the more you apply the more desperate you appear so they won't take risk on you. Just an idea but have one of you tried to apply in stead of joint application? It may be there is something on one your past that credit company might not like but may be prepared to lend to other one.

Check both your files for mistakes or fraud. I sound a lot like you OP. Always pay everything off in full every month and I got interest free credit from ikea about 18 months ago even though on paper I'm in a lot of debt because I also took out a £10k loan to add to the savings to pay for an extension, had a car on finance and had some 0% credit card debt.

I'm one of those people who never pays a penny in interest and exploits all the offers and I'm still getting credit and was over £30k in debt on paper not so long ago (I put a lot of the 0% money in savings accounts to make money).

The affordability thing - DH is the applicant, he earns £70k a year. I have my own income on top, though obviously this isn't counted for the check, which is in his name. We want to borrow £6k.

Mortgage is v small (a couple of hundred a month - we have chosen to live in a cheap area, because we are debt-averse), we have no other debt, just the usual bills that are paid in full each month. No kids. So our disposable income is high.

I am worried that there is something on a file somewhere that I'm not aware of that is screwing us over!! But Experian and Noddle reports are both fine.

Paying off your credit card in full every month is not the problem.

We pay our cards off every month, Annual income in excess of 120k and no mortgage or loans. Only ongoing commitment is my Tesco sim only mobile @ £10 month with no contract term.

I have never had a red bill in my life and always pay on time.

We had no problem getting a £25k bank loan with Sainsbury's six months ago.

A couple of years ago the Yorkshire bank declined my credit card application - I had banked with them for 31 years at the time!

I have no bloody idea how it works.

hotel - How utterly weird! I am sort of comforted to know it's not just me, but also sort of worried about how arbitrary it all seems to be.

It really is a first world problem, but I just spent 5 HOURS in Ikea (enough to drive anyone mad!!) finalising my perfect kitchen, only to be told I couldn't get credit so I am feeling narked off. I can unlock savings, but this costs me a fairly hefty interest penalty. Plus, I'm worried about the underlying reason why I'm being rejected. It doesn't make any sense, and I feel a bit paranoid now that something is going on that I don't know about.