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Original poster

Rejected finance - why?

34 replies

CucumberCool · 26/07/2022 16:41

Denied finance with klarna! It was for £399 phone (17.99 a month). Interest free.

My credit rating according to Experian and credit karma is 'excellent'.

I earn just shy of 26,000£.

I have a accounts with 3 clothes shops/catalogues, no money oweing...

Why was denied? I have no outstanding debt.

As I big purchase I wanted to boost my credit rating at the same time. Im thinking of using my excellent credit rating to get a credit card and pay for it that way.

I have enough savings to buy with credit card then pay of fully a month later.

Is this a good idea?

OP posts:
alnawire · 26/07/2022 16:50

Klarna make no sense. Use a proper form of credit if you need to. Sometimes Klarna will let me buy stuff totalling hundreds, others the balance I owe is zero and they won't let me use it for £50.

titchy · 26/07/2022 16:58

If you've got an excellent credit rating why would you use Klarna? That's for people with poor credit histories. And if you have enough in savings why not buy outright?

alnawire · 26/07/2022 17:16

I don't have poor credit but I used klarna because it didn't show on my credit report, that's all.

Original poster
CucumberCool · 26/07/2022 18:25

I want to do it that way to continue to boost my credit rating and history.

If I ever want a mortgage I will need a good credit history right?

OP posts:
Original poster
CucumberCool · 26/07/2022 18:25

And klarna is the only option for buying this phone without any interest

OP posts:
alnawire · 26/07/2022 18:50

CucumberCool · 26/07/2022 18:25

And klarna is the only option for buying this phone without any interest

Credit card?

Original poster
CucumberCool · 26/07/2022 18:59

@alnawire that's my next option which I think I will do

OP posts:
Eatthecake80 · 26/07/2022 19:17

We have used klarna for years but all of a sudden we can’t!…just be warned that klarna now report to credit reference agencies if you are wanting a mortgage.

titchy · 26/07/2022 19:23

But you said your credit rating is good, so why do you want more credit? If you can buy it outright, do so.

BarbaraofSeville · 26/07/2022 19:57

I don't see the point of klana and the like. It's like all the disadvantages of a credit card with none of the advantages.

Just pay for the phone on a credit card and transfer the balance to a 0% deal if you can't pay it off before the interest kicks in.

If you can't get a credit card buy a cheaper phone. I've never spent anywhere near £400 on a phone, I've just got a great deal on a Samsung one for £150

alnawire · 26/07/2022 20:14

BarbaraofSeville · 26/07/2022 19:57

I don't see the point of klana and the like. It's like all the disadvantages of a credit card with none of the advantages.

Just pay for the phone on a credit card and transfer the balance to a 0% deal if you can't pay it off before the interest kicks in.

If you can't get a credit card buy a cheaper phone. I've never spent anywhere near £400 on a phone, I've just got a great deal on a Samsung one for £150

It was marketed as a changing room initially. So you order 4 dresses in 2 sizes and send back what you don't want before you have to pay for it.

BarbaraofSeville · 26/07/2022 20:17

But you can do that with a credit card. I do it all the time. Order the different sizes and options. Pay by credit card, by the time the bill comes out of your account all the returned items have already been credited and reduced your bill.

alnawire · 26/07/2022 20:22

I know, but that's how it was marketed all the same.

crochetmylifeaway · 26/07/2022 20:28

Klarna have really become quite poor recently. I used them previously and even bought a large kitchen appliance through them no problem at all. Ordered kids stuff at Christmas and spread the cost - it was brilliant. Then suddenly I keep being told I'm not approved and I can't use them. I owe nothing but still they say no. It's happening a lot to a lot of people since they started reporting to the credit agencies which I think kind of defeats their purpose as there is no point reporting if they never lend!

PayPal have begun doing pay in 3 interest free which is a lot easier. I don't have a credit card and don't want one either but it's useful to pay in smaller payments especially if someone needs new shoes at the wrong time of the month and you don't want to leave yourself short just incase something else goes wrong.

Original poster
CucumberCool · 26/07/2022 20:59

@titchy I might be wrong in my thinking, but I'm trying to build my credit history to give me a greater chance of a mortgage in the (very far probably) future.

I'll go down the credit card route I think.

@BarbaraofSeville I know what you mean and have never spent so much on a phone before but I want to super-duper camera and it will (bloody well should!) Last me at least 5 years...I am totally splashing out though I know!

OP posts:
Stomacharmeleon · 26/07/2022 21:10

Wouldn't it make sense to get your phone interest free with sky or Tesco then? On a contract? Be good for the credit score too if paid regularly and on time.

locomocol · 26/07/2022 21:13

I liked the klarna aspect of try before you buy so would often order 2 of everything in each size & I used to find the returns process easy as opposed to checking I received the money back

locomocol · 26/07/2022 21:17

compared to a credit card I liked returning stuff & then seeing what i had to pay with the image icons. credit card I would have to work out what I was owed back. pure laziness but I tend to shop in bursts eg today I spent 1k on stuff for me, DH & the kids.

alnawire · 26/07/2022 21:21

Trying to build your credit history just use your credit card. Klarna and any other short term borrowing is bad for your credit, not good. I would close 2 of the clothes shop accounts as well. Even though you owe nothing the fact that you have so much credit available will go against you.

AverageJoan · 26/07/2022 21:25

If you want to boost your credit file then try get an interest free credit card, or just any credit card and make sure you pay the balance in full every month.

titchy · 26/07/2022 21:29

Using crap credit product to build a credit history looks worse not better!

Make sure you're on the electoral roll,
pay your council tax and other bills by direct debit, have a phone contract, and maybe one standard credit product (credit card or high street unsecured loan for a car maybe). Not a series of second class products designed for those with low incomes.

GOODCAT · 26/07/2022 21:33

To get a mortgage you don't need to have borrowed before. You are a better bet for a lender if you haven't and you manage your money without needing to borrow.

DelilahBucket · 26/07/2022 21:36

Just get the phone on a contract? And don't kid yourself it will last five years. They tend to stop running updates after three and then they quickly become defunct if you use apps.

Canihaveacoffeepleasexx · 26/07/2022 21:41

I think if you have any missed payments on your credit file, Klarna stop you being able to use them. They do a credit search every time you apply. Also they do report to credit agencies now - if your wanting to get a mortgage it’s not good to be using catalogues etc from what I understand

KILM · 26/07/2022 21:50

If its to do with a mortgage OP, we bought a house last year and i was worried as i've never had a credit card either but our mortgage advisor wasnt bothered and we didnt have any problems getting a mortgage. He was of the opinion that building up your credit history like that is only really useful if you've either defaulted in the past or have very little history to go on whereas i had several years of paying phone, rent and bills by direct debit. If you are concerned and its mortgage related id really recommend chatting to a mortgage advisor about your specific circumstances.

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