[rickyjones1209]

Is it possible to have too much available credit with regards to credit score?

I'm in the process of getting finance sorted for my much awaited 335i but I'm having a bit of bother. I've never been one to have loads of debt, I've always earned decent money and managed my money very well. As a result in the past 3-4 years I've had a credit score of 999 and had no problems getting credit.

As of 2 years ago I had one credit card with next to £0 on it at all times and 1x 10k loan for my old Leon Cupra R. I sold my car to put deposit down on a house but kept paying the loan seperately. Which was fine even though I had 2 years left to pay on it. Perhaps not the most sensible thing to do but at least I had a house and could afford the repayments. Anyway, from moving in myself and my partner had incurred additional expenses so we took out a loan to pay off borrowed money etc. Fine. But instead of doing a joint application just to make it easy I put it in my name. This loan and my previous loan finishes in August thankfully.

In the past few months I popped the question to the missus and so put about 3k on my credit card and we booked a holiday on a 'joint' credit card but also in my name in the eyes of the lender.

So now I got 2 loans running out in August and 2 credit cards. Although this sounds like a lot I'm actually pretty comfortable with it. Me and the missus earn plenty enough to pay it off each month and our 2 year fixed rate mortgage repayments will drop by £200 a month next month too, great!

I've also saved 3k in the last 2 years as I've always known that once this summer comes about I'll want to buy a nice new car So plan was to pay off my loan a couple of months early with my 3k savings and take 15k loan leaving me with about 16.5k for a car. The credit card with the engagement ring will be paid off in next 6 months and our 'joint' loan and 'joint' credit card will also be paid off in next few months.

But Tesco Finance don't seem too happy about giving me a new loan since I got a 2nd one with Sainsburys and my credit cards have balances on them too. Even though my credit score is still high they have referred it to a team to see if I can get approved for this loan. My view is that my repayments amount will be similar to what I've always paid and I've never missed a payment to them before so whats the problem. But they say I might have too much credit so I'm a higher risk. Does this sound right?

I'll be fuming if I've screwed myself over by putting things in my name and I have to wait a few more months before I can get a new car. I've got to speak to Tesco finance tonight to see what they say so I'll keep you posted. On the plus side if I have to wait til July/August when my loan finishes I'll have more like 20k to spend rather than 16k....but I want a car now Ive waited so long!!

Anyway, just wanted to vent some frustration!! I am still defo getting a 335i this summer whatever happens.

[xenon]

You've summed it up exactly. A credit score of 999 is obviously top and would normally see you through but they obviously weigh up their risk exposure if your credit payments are approaching a significant amount of your income. Are you sure your score still sits at 999? The credit score is not just how well you make payments it also views the amount you actually have outstanding. I'd be surprised if it was still 999 given the circumstances you have described.

I've been told (but I don't know if it is true) that what you spend money on also affects it, i.e. buying jewellery on credit cards may be viewed as a higher risk.

[dobbo99]

you might find that its just Tesco finance (or whoever underwrites them), they have just rebuffed my mum for a 10k loan to buy a new car, saying that they dont think they will manage the repayments based on their current mortgage payment figures - despite the fact she earns 1k a week and their mortgage is only £500 a month.
this doesnt take into account my step dads earnings either. just seems stupid to me.

they were very quickly approved elsewhere (Nationwide and HSBC), who seem a little more relaxed with their lending.

[ihpj]

The fear the underwriting company has is that if you have ££££ available credit and then have to dip into hat and then have your commitment to them to pay, you might not be able to meet all your commitments. Having too much free credit can count against you and (IMHO) it's always better to carry a small'ish balance across all your lines of credit than to have a couple of credit lines with 10k available but not used.

Basically they are looking at the worst case scenario.

[rickyjones1209]

Originally Posted by ihpj

The fear the underwriting company has is that if you have ££££ available credit and then have to dip into hat and then have your commitment to them to pay, you might not be able to meet all your commitments. Having too much free credit can count against you and (IMHO) it's always better to carry a small'ish balance across all your lines of credit than to have a couple of credit lines with 10k available but not used.

Basically they are looking at the worst case scenario.

I think it may be down to this more so than how much I actually owe.

My loan for my old car is £315 a month and final payment is August so is about £1200 outstanding. The joint loan was a big one of £445 a month but again final payment is August so about £1800 outstanding.

The credit card which I bought the 3k engagement ring now has about £2300 on it with a limit of £3500 and the 'joint' credit card (still in my name) has about 2k on it but a limit of 5k. I also have a third credit card with £0 on it but a limit of £4.5k. So I suppose I have about £8.5k of available credit on just my credit cards plus the 2 loans.

But last night I reduced the limits down to 3k on the joint card and 1k on the one that doesn't get used. So got rid of £5.5k of available credit. Hopefully this will help.

My credit score now that I've checked has dropped to 942 from 999 3 months ago. Must be from the balances recently applied to the credit cards as that is the only things that has changed.

So frustrating though. I'm going to be miles better off in the next 6 months but I appreciate the lenders need to base their decision on risk.

Anyone want to lend me 15k at a good rate?

[nicktyler]

As has been implied there is not much chance your score is 999 under these circumstances. Nobody with any debt or even a credit card with £0 on it will have that score.

The main problem being that if you have a credit card with access to £xxx they see it as you have that amount of debt because the day ofter the loan is given to you you can go out and max it. Know what I mean?

Also as said Tesco are one of the hardest lenders to get credit from as with M&S and other non financial institutions.

I would suggest going to your bank. The facct that you have been turned down by Tesco will go against you and have a negative impact on your score for the next 3-6 months as well.

I have not got a great score and have a bit of debt like you. I was turned down by many when trying to buy my car and then went to my internet banking saw a link, thought I'd give it a try and the money was in my account within 10 mins. I diddn't even have to talk to anybody and to top it off the interest rate was better than any of the other loans I had applied for.

[rickyjones1209]

Originally Posted by nicktyler

As has been implied there is not much chance your score is 999 under these circumstances. Nobody with any debt or even a credit card with £0 on it will have that score.

The main problem being that if you have a credit card with access to £xxx they see it as you have that amount of debt because the day ofter the loan is given to you you can go out and max it. Know what I mean?

Also as said Tesco are one of the hardest lenders to get credit from as with M&S and other non financial institutions.

I would suggest going to your bank. The facct that you have been turned down by Tesco will go against you and have a negative impact on your score for the next 3-6 months as well.

I have not got a great score and have a bit of debt like you. I was turned down by many when trying to buy my car and then went to my internet banking saw a link, thought I'd give it a try and the money was in my account within 10 mins. I diddn't even have to talk to anybody and to top it off the interest rate was better than any of the other loans I had applied for.

Yeh my score 4 years ago was always hovering around 700 but I began saving and got rid of all debt apart from the one loan for my car and my credit score reached 999 and stayed there for ages. It was 999 back end of last year when I checked even though I still had balances on credit cards but it has dipped since adding 5k across 2 credit cards. Understandable I guess. Plan now is reduce the limits as I have done and get the balances cleared in the next 6 months and have just my one loan for a car again.

Hopefully by reducing my limits I have reduced my risk to the lenders, and since they can see if always paid my loan on time the referral will go through. I'd prefer to do it though Tesco or similar since the interest rate is 6% compared to the banks higher rates of 10% or so I guess? Unless I'm wrong?

[phil200tdi]

Get a 0% Balance Transfer Card.

You could get upto £10k loan with a 1.6% fee for 16 months then flip to another low fee BT card then... It would cost you total £160 fee over that period.

http://www.moneysavingexpert.com/car...#barclaycard16

[rickyjones1209]

Originally Posted by phil200tdi

Get a 0% Balance Transfer Card.

You could get upto £10k loan with a 1.6% fee for 16 months then flip to another low fee BT card then... It would cost you total £160 fee over that period.

http://www.moneysavingexpert.com/car...#barclaycard16

I'm not worried about my existing balance on credit cards as they will be gone in next 6 months or so.

Can you move the balance of a loan to a credit card though?

[nicktyler]

You can move the balance from a loan to a credit card by just ringing up and using the credit card to pay the balance on the loan. The idea then is to take the 16 months interest free and then when that is up transfer to another 0% deal for the next xx months saving all the interest and just paying the transfer fee which will be smaller the less debt you have. It's called "credit card flipping"

problem is the chances af you getting a )% card for 16 months with a less than perfect credit score are slim and for that amount of credit are less than none. Not trying to sound pessimistic but what is more likley is they turn you down or say no to £10k+ but "you can have £1500" which is also usless and in the mean time you have a credit check on your file which hurts your score further reducing the chance of getting accepted. Bit of a catch 22.

However if you think it is worth the risk then you should apply. As you say in 6 months time your score will have recovered if you get turned down a lot now and then you will have very low debt then anyway and can try again.

[phil200tdi]

It works either way. I was proposing that you get the BT card for purchasing the car...ie:

1) Buy the car on a credit card (ideally a cashback credit card)
2) Balance transfer the £10k debt to a 0% card. pay fee.
3) Pay off the card in full within the 16 months, pay some off or just pay the minimum every month and flip the debt to a new card at the end of the period..

I dont think my BT card asked about the balance transfer ammount, the limit was £10k. If approved you have the limit..

They have subsequently offered to up this again and again. But I paid it all off.

[rickyjones1209]

This credit card flipping sounds great with 0% and I have done it in the past but its hassle and I don't think it'll work with a 17k car purchase

Anyway Tesco said I need to wait til tomorrow now. So I think I might tell them to stick it. For the time being at least. I'll pay off the £1200 I owe them, in turn hopefully helping credit score and then when I get paid at end of month pay another £500 off credit card. I'm also going to cancel the credit card I don't use altogether as it hasn't been used for years.

Then I'll reapply next month with Tesco. If I don't get the listed 6% interest rate I hope they would at least offer me an 8% loan which would make the difference of about £10 a month. Not loads I guess, over 60 months it adds up but I'll do whatever it takes to get a new car at this point and I think I'll just bite the bullet.

[quattrogmbh]

Careful though. The number of credit searches made will also decrease your score. Lenders expect to see 1 or 2 in the preceeding 12 months.

[Moh]

I'm pretty sure you can't transfer a balance from a loan to a credit card