Refused credit but have an excellent rating?

[rach912]

Hi,

I was offered 0% interest credit option at dreams last week when buying a bed and mattress (I spent just under £1,000). When the sales guy put it through it refused me. I have always had good credit but double checked on both experian and equifax when I got home and all my accounts are fine. I have a mortgage and have had credit cards so it's not like I have never built up credit and my rating is 999 out of 1000 and states it's excellent. Could anyone shed some light as to why this would happen? it's not even like it was for a large amount of credit?

Any advice greatly appreciated.
Thanks

[Buenchico]

Your credit status is only partially determined by your record of keeping up your payments. There will also be a maximum figure which lenders believe that someone with your income will be able to handle.

If we ignore your mortgage for the moment (although, of course, it will actually be taken into account), let's assume that you've got credit cards as follows:
Card 1: £3000 limit. Balance = £0
Card 2: £4000 limit. Balance = £2000.
Card 3: £2000 limit. Balance = £50.
Card 4: £5000 limit. Balance = £0.

When your credit status is being assessed, it won't be the figure of £2050 (that you currently owe on your cards) which is taken into account. A potential lender knows that you can walk out of the door and immediately 'max' all your cards (without needing any further credit checks), up to a debt of £14,000. If the maximum debt which their computer program thinks you can handle (on top of your mortgage repayments) is £14,000 or less, you won't get a single penny of additional credit.

Chris

[hc4361]

Chris is absolutely right. If you have credit cards you don't use and don't need, cancel them in writing. Cutting the card up is not enough, you need to terminate the contracts.
The sensible thing is to have £2 - £4k available credit for dire emergencies. Anything above that is hopefully unnecessary.