Have I ruined my credit rating? Refused credit card

MaryMcK

Registered User
Messages
23
Hi,

Hoping someone can advise. Long story short, I made a large purchase on my Avant Card (€3300 and had a balance of €400 already). I have a savings account with over €16k but am using that as an eventual mortgage deposit and did not want to have withdrawals.

Had the brainwave to apply for a 0% balance transfer with KBC, whereby I would clear it in the 6 months. I received a call today and have been refused credit.

They asked for details on my finances so knew about the outstanding balance I wanted to transfer.

- Explained I paid rent at €500 per month.
- Have just placed my rental property on the market so also pay a mortgage of €490.
- Have one dependant.
- No other debt.
- I have an overdraft facility on my current account of €1000, unused, I’m in debit €1000 present.
- I have another post office account with approx €1000 in it.
- I also have a bank of Ireland credit card with 0 balance.
- monthly net income is approximately €2600.

They were not clear on why I was refused. I would imagine it’s because I’m now shouldering the rent and mortgage, although it’s manageable for me, just means I can’t save as much until house is sold.

Now I’m panicking that their refusal will affect my credit rating...

It gets worse. Bare with me. Before I thought it through properly, I’ve made an online application to PTSB for a 0% balance transfer card. That’s when it hit me.... they can probably see KBC have refused me and the whole situation will affect my credit history as I look like a desperado. I’ll get a call back from them in morning.

Any advice on what I should do? Is it as bad as my overactive imagination is making it seem???

Thanks in advance
 

MaryMcK

Registered User
Messages
23
Not so bad then, thanks @RedOnion.

Still they’ll be wondering why and putting 2 and 2 together. Have you any suggestions as to where I should go from here? My first option is to hide under the bed when PTSB call in the morning but don’t think that’s the way to go...

I should really get rid of the unused BOI credit card. All I use it for is paying the €30 a year!
 

MaryMcK

Registered User
Messages
23
Anyone else able to advise?

Is it a bad idea to try to apply with PTSB in morning? Should I just decline the call or give it a shot?

If I decide to just pay the outstanding balance, how bad does it look to take such a large sum from savings meant for a deposit. Although the amount will be replaced and more upon sale of house.

I’d really appreciate opinions from those of you more savvy to these matters than I.
 

John Locke

Registered User
Messages
34
Hi Mary,
I'd recommend just paying off your credit card from savings.
You're going to have to pay it off sometime, and banks will look for credit card statements anyway when assessing you for a mortgage. They may ask you where the money went or what it was used for, but they may ask you that anyway.
Keep it simple!
 

so-crates

Frequent Poster
Messages
1,739
Early next year all going to plan, so 8/9months
Pay that balance off from savings now then, that way you will have 6 months nice and tidy bank and cc statements. if you wait to pay it off, then you will definitely have to pay within six months of making a mortgage application and have to explain it.
 

MaryMcK

Registered User
Messages
23
Thanks all.

This morning I was approved for 0% bal transfer from PTSB, documentation pending.

I could have paid it outright from savings but would rather not touch that money and just clear it down myself each month. 0% credit will make this easier.
Will you not have a deposit from the house sale?
Yes, I will. However I also wanted to show a good record of saving in addition to any lump sum received from sale.
 

Leo

Moderator
Messages
9,823
I could have paid it outright from savings but would rather not touch that money and just clear it down myself each month.
With this approach, when you present 6 months of financial records to a bank seeking a mortgage, they will see the history of those payments. Some will factor in the risk of history repeating itself and reduce the amount they are willing to offer you on that basis.
 

MaryMcK

Registered User
Messages
23
With this approach, when you present 6 months of financial records to a bank seeking a mortgage, they will see the history of those payments. Some will factor in the risk of history repeating itself and reduce the amount they are willing to offer you on that basis.
I hear what you’re saying Leo. My plan was to just continue to clear down the debt, interest free and clear in full when the house sells. All the while leaving savings intact and continuing to save.

Hmm, maybe I should just forego the new card and balance transfer and clear the card immediately from savings? Is this what you guys would suggest?

I confess I’m confused.
 

Coldwarrior

Frequent Poster
Messages
114
Hmm, maybe I should just forego the new card and balance transfer and clear the card immediately from savings? Is this what you guys would suggest?
Yes do this, as so-crates said better to have 6 months of clean statements. Add what you would have been paying in credit card payments to your savings to build them back up quickly.
 

Leo

Moderator
Messages
9,823
Agreed, the amount you have been saving for the past number of months is a strong indicator of affordability.
 

MaryMcK

Registered User
Messages
23
Thank you. Valuable advice I’ve taken on board. I will cancel the new card. Clear the balance from savings and just keep putting as much as I can into said savings each month, rather than to the card.

Now I can only hope my house sells soon for a fair price allowing me to move forward.

All contributions appreciated, thanks once again.
 

AlbacoreA

Frequent Poster
Messages
3,208
Maybe its because you've no credit history of managing a loan and paying it back. (other then the mortgage).
 
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