Unable to get 0% credit due to Yorkshire Bank default

[Tools]

In line with Yorkshire Bank issuing a claim against me for non repayment of (pending the decision of the test case) unlawful bank charges & my subsequent counterclaim, they issued a default on my personal account.

Since registering that default I have been unable to successfully gain, previously no problems, 0% promotional rate credit. After two or three applications and Sky Card offering me "0% balance transfer cheques" on a dormant account. I have decided to see if I can establish the exact reason for their decisions.

My credit report with Experian is unblemished aside from one or two late payments on one current credit card(MINT). I have an available amount of £19000 approx credit.

I currently owe approx £10k on MINT (now expired promotional rate of 0%) and approx £4K on Virgin Card (again 0% rate due to expire this month)

The credit limit on my unused Sky Card was lowered to £250 from £10K around 6 months ago when all the card issuers decided to have guilt trips on `responsible lending`. Soooooo....... I sent the following letter to request a credit limit increase to make full use of their 0% balance transfer cheques offered.

Skycard Credit Services Department
PO Box 6476
Northampton
NN4 1ZN


Skycard Account Number: XXXX XXXX XXXX XXXX

Dear Sirs,

I recently telephoned your Customer Services Department and enquired about the possibility of increasing my allowed credit limit which currently stands at £250. It was previously at a higher level and because of under use reduced. Your operative informed me that if I required an increase I would need to contact your department in writing expressing my request of an increased limit.

In my favour I would like to point out that I have been a customer of yours for some time and have always serviced my account in a timely manner and always complied its Terms & Conditions. I currently have a total balance of approximately £14,000 on two other credit cards and wish to transfer all if not most onto one single card. I would also like to take advantage of your recent postal offer of transferring a balance using your 0% cheques until January 2009.

I realise that before you make such a decision it will be necessary to make credit searches with the main Credit Reference Agencies such as Experian and the like. I must inform you that presently there is one default registered against me by Clydesdale Bank T/A Yorkshire Bank for an amount of £251. This is subject to dispute and counterclaim within the Wakefield County Court. I am also in the process of issuing a claim for damages to my credit rating because of this incorrect default record, a Notice of Correction to that effect is due to be added by Experian quite shortly. I would be appreciative if you would consider this information when processing my request for a credit limit increase.

According to Experian I have the following copied directly from my credit report

Calculations based on your credit report on Tuesday, June 17, 2008
You have £19,119 of available credit (excluding mortgages)
You have £15,391 of outstanding debt (excluding mortgages and defaults)
You are using 44% of your available credit
You have 24 credit accounts (including settled accounts)
You have 0 accounts overdue
You have missed 7 repayments in the last year
Your credit report has been viewed 5 times in the last 3 months and 3 times in total over the last year
You have 0 public information records
You have 21 aliases and/or financial associations
You have been at your current address for 14 years 5 months
You are on the electoral roll at your current address
You have 0 notice of correction on your credit report
I therefore feel that when taking all the information available to you I pose no risk of bad credit to Skycard and hope this may be in favour of my request. If you feel unable to process my request would you please reply to me explaining your exact reasons for your decision.

I thank you for your time and hopefully look forward to a positive decision

Yours Sincerely

I will post their reply on this post after I have had chance to scan it in.

[Amethyst]

Re: Unable to get 0% credit due to Yorkshire Bank default

You have 21 aliases and/or financial associations

do you ?

[Tools]

Re: Unable to get 0% credit due to Yorkshire Bank default

Moving swiftly on ahem,

Here is the 2nd letter going out to them in the morning.

Hollie Jones
Complaints Advisor
4 Bouverie Square
Upper Third Street
Milton Keynes
MK9 1EB

Customer Reference: XXXXXX
Skycard Account Number: XXXX XXXX XXXX XXXX

Dear Ms Jones,

Thank you for your reply to my recent letter, however you seem to have mistakenly understood it to be a complaint, I assure you it was not.

To reiterate, my original letter was a request for an increased credit limit to be applied to my account. I wholly accept that you are unwilling to do so, that is not an issue. My letter also asked for you to provide details, if unsuccessful, of the criteria used for making such a decision.

You have very kindly explained several ways in which your decision is reached including

1.Payment history.
When checked with Experian, a search reveals this to be satisfactory.

2.Public records.
The only detrimental information held by Experian is the disputed default entered by Yorkshire Bank.

3.Amount owed.
Again, according to a search of Experian, I have £19,119 of available credit (excluding mortgages), using a total of only 44% of my available credit.

4.Length of credit history.
I have a good credit history dating back for more than 20 years.

5.New accounts.
I do not have `multiple accounts` opened in a short period of time.

6.Searches.
I do not have a large number of recent searches applicable to me.

7.Accounts in use.
In my opinion I do not have excessive amounts of accounts in use

From your answers I can only be led to believe that the only reason for your refusal to apply an increase to my credit limit relates to point number 2, the Yorkshire Bank default.

Would you please be so kind as to confirm this just so I can understand your decision. I realise that the scoring system may usually be an automated one with limited manual intervention, but in light of my previous written request I would expect some degree of human intervention at some point.

May I again thank you for your time and reassure you that this, nor the previous letter is in any way a complaint, but merely a request for clarity of your decisions. I have always received a high level of service from Sky Card and have never had any cause to complain.

I look forward to a more detailed and individual reply regarding my account and not just an overview of general policy.



Yours sincerely

Tools

[argentarius]

Re: Unable to get 0% credit due to Yorkshire Bank default

It is not normal practice for any credit supplier to provide the exact reason for their decision not to advance credit, increase credit limit, or whatever. To do so would (in theory) enable people to manipulate their account behaviour to get around the credit scoring systems.

I realise that in your case, this is not the case.

But I should also point out that:

(1) the fact that you've obtained 0% funds easily in the past is not a reliable guide to current underwriting behaviour. Lenders are being far more restrictive in the granting of credit and particularly in allocating 0% funds due to the credit crunch.

(2) the fact that you have an unresolved default is a significant issue in any lender's assessement of an underwriting decision. I don't believe that a customer's assertion that the default is incorrect or based on illegal charges or whatever will carry any weight at all with a prospective lender - as far as they are concerned, it's a default. I'm not sure why you let a £251 debt become a default when you appear to have ample credit available elsewhere - whether you believe that the charges involved are illegal or not, simply ignoring them doesn't help your position IMHO.

(3) you haven't explained the fact that you have 7 missed repayments in the past year. You refer to a couple of late payments. 7 missed repayments in a year is also a significant underwriting factor.

What I'm trying to say is that:

(1) I doubt they'll tell you that the decision is entirely due to the YB default (because I doubt they'll provide any further information);
(2) I doubt that the decision *is* in fact entirely due to the YB default given the number of missed payments in your recent credit history; and
(3) Perhaps your circumstances will warn others of the adverse implications of allowing small debts (albeit caused by "illegal" charges) to go to default, if they are in the fortunate circumstances of having available funds elsewhere to repay them.

As an aside, this part of the Experian credit report:

You have £19,119 of available credit (excluding mortgages)
You have £15,391 of outstanding debt (excluding mortgages and defaults)
You are using 44% of your available credit

doesn't make sense. On those figures, you are using 81% of your available credit, which may also be seen as an adverse underwriting issue.

[stevokenevo]

Re: Unable to get 0% credit due to Yorkshire Bank default

Another factor which i have learned, is, having what could be seen as large amounts of available credit can be a hinderence also.

The fact that it is available means it is a potential debt, and therefore new lenders may be unwilling to add to that potential debt.

All in all it just goes to show that there are many factors which add together to reach a lending decision.

[argentarius]

Re: Unable to get 0% credit due to Yorkshire Bank default

Indeed.

And credit providers don't care in the slightest how much cash you have, when assessing your creditworthiness, even though it obviously should be a key factor in their decision-making.

It's a bit of a "black art", this underwriting lark.

I am currently trying to remortgage and am getting fed up with answering stupid questions from the lender, and even more fed up with the fact that they can't understand certain concepts (like 0% credit cards) and impute ridiculous amounts of repayments even for cards which have minimum payments of only £5 per month.

I was on holiday for 2 weeks and came back home to a voicemail message - on my work phone number, even though they had my mobile - asking questions which I'd already answered as part of the original application process. D'oh!