# credit rating / loan refusal but allowed credit card?



## miju (16 Aug 2006)

just wondering if anyone can figure this one out as I find it quite perplexing:

had a bit of financial trouble year and a half ago , defaulted and know i'll have band credit rating for next 5 years or so which is fair enough (much more financially secure now BTW)

however i'm scratching my head at this one:

have banked with AIB for years and about 7 months ago got one of their credit cards , balance paid off in full every month / NEVER missed a payment on it (except for last month but i know that doesnt effect your credit rating anyways once minimum is paid)

so anyways applied for a loan from AIB for 3k (towards a new car) but they refused fair enough given the above *BUT* the thing that bugs me is that my credit limit on my card is €3,600 and I could just as easily (though it would be very stupid) withdraw 3k from the card into my account

so in other words the won't loan me 3k if i apply for it but are fairly happy to let me rack up €3,600 (if i wished) on my credit card

i missed a direct debit for my car insurance last month (a minor oversight on my part) BUT it was paid the very next day which i'm sure AIB could see as well so am figuring that wouldn't matter.

does anyone see the logic in this one or am I completely missing something here?????


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## Guest107 (16 Aug 2006)

different departments have different computers is probably the reason. 

 1. Ring them Increase credit limit by €4k on the card to €7.6k
 2. go to the your branch and loudly (friday afternoon when very busy) kick up a stink at the counter 
3. ask them what they are at giving you €4k one day and refusing you €3k then next , what kind of bank are they, explain this madness please ??
 4. and demand they remove the extra €4k credit limit again if they wont give you a loan and THEN give you the loan, 
 5. make sure everybody hears it going on, bankers hate to sound stupid.

at least you will have some fun .


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## miju (17 Aug 2006)

LOL thanks 2pack , sounds like a plan , i know bad credit rating and all but at least im glad to see im not the only one who thought this was a bit warped


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## dam099 (17 Aug 2006)

miju said:


> so anyways applied for a loan from AIB for 3k (towards a new car) but they refused fair enough given the above *BUT* the thing that bugs me is that my credit limit on my card is €3,600 and I could just as easily (though it would be very stupid) withdraw 3k from the card into my account
> 
> so in other words the won't loan me 3k if i apply for it but are fairly happy to let me rack up €3,600 (if i wished) on my credit card
> 
> does anyone see the logic in this one or am I completely missing something here?????


 
There may not be logic to it but bear in mind that if they give you the loan of 3K then you could still go in the next day and withdraw 3,600 on the credit card aswell leaving them on the hook for 7,600 unless the credit card limit is reduced as part of the package.


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## ClubMan (17 Aug 2006)

Also - where somebody (not you by the looks of things) has credit risk issues then it may make sense for the institution to lend up to €3,600 at credit card interest rates rather than €3,000 at personal loan rates with the price of credit reflecting the risk to the lender.


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## Guest107 (17 Aug 2006)

Not quite clubman.

AIB cc rates are 15% (crudely)

50% of people pay them off in full all the time therefore the effective rate for those who _DO PAY INTEREST _is 7.5% across the loan book. Thats the same as a personal loan from AIB, innit.

You must be thinking of near moneylender 23% CC rates like the 22.9% MBNA rate on their CC . That covers a fair bit of risk so it does.


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## ClubMan (17 Aug 2006)

No - I'm thinking of the case of a single individual rather than averages.


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## miju (17 Aug 2006)

actually Clubman that makes alot of sense alright , ah sure don't matter anyways , ah sure i'll just keep saving , loan would have been nice though to try and repair my credit rating a bit


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## ClubMan (17 Aug 2006)

Of if you need a loan then shop around for the best deal - don't just restrict yourself to financial institutions with whom you already have a relationship.


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## gnashers (17 Aug 2006)

I had a similar case before. When I was a student I had an account with AIB. They gave me an overdraft, a credit card and a loan but when I applied for a laser card I was told they didn't give laser cards to students!!! 
They'd give me all the credit I wanted but not easy access to my own money.  It was a while ago though so I'm sure things have changed.


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## miju (17 Aug 2006)

ClubMan said:


> Of if you need a loan then shop around for the best deal - don't just restrict yourself to financial institutions with whom you already have a relationship.


 
aye  clubman , am planning to shop around , it's a case of half need the loan / half need to repair credit rating (which is curently my prioirty) will more than likely end up having to get itoff a sub prime lender (which i'm not happy about but though lesson learnt etc etc)

can anyone tell me if any of the sub prime loan companies who record their loans with the ICB as if i do get a loan i damn sure wanna make sure it appears on the ICB as paid on time / in full etc to help repair it

actually while i'm at it does anyone have any other good tips for repairing your credit rating? i'm planning to get a copy of my records from them to see if there's anything outstanding i've forgotten about so i can pay that off also (though i'm not sure if doing this will have any effect on my credit rating)


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## ClubMan (17 Aug 2006)

Have you searched for previous threads on credit ratings and how to "repair" them?


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## momomo (17 Aug 2006)

gnashers said:


> I had a similar case before. When I was a student I had an account with AIB. They gave me an overdraft, a credit card and a loan but when I applied for a laser card I was told they didn't give laser cards to students!!!
> They'd give me all the credit I wanted but not easy access to my own money. It was a while ago though so I'm sure things have changed.


 
That happened to me a couple of years ago too, credit card, loan no problem. Laser Card, turned down!  Unbelievable


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## Raskolnikov (17 Aug 2006)

Same with Bank of Ireland, if you have a student account, a credit card and even a loan, you won't get a debit card with them.


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## Mag2006 (21 Aug 2006)

Oh my God...lol!!!. The banks are really having a laugh. They are stupid afterall. 
Here is another scenario that happened me once. Had visa(€4.5k), laser, personal loan, savings account and current account. There was 3k left on a 5k loan so I rang to top it up by €4k and they refused me and no reason given and when I was applying for the top up they commented on the fact that I was ahead on repayments as I had put a chunk off it earlier in the year to speed up repaying it. I was still declined and to this day I do not know why!!!


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## liteweight (21 Aug 2006)

OH  applied for an overdraft which was denied and was not given any reason. Overdraft was for 1k on a thrift account. Laughable thing was that there was 100K in total with the bank. We pulled ALL accounts!


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## liteweight (21 Aug 2006)

miju said:


> have banked with AIB for years and about 7 months ago got one of their credit cards , balance paid off in full every month / NEVER missed a payment on it (except for last month but i know that doesnt effect your credit rating anyways once minimum is paid)
> 
> so anyways applied for a loan from AIB for 3k (towards a new car) but they refused fair enough given the above *BUT* the thing that bugs me is that my credit limit on my card is €3,600 and I could just as easily (though it would be very stupid) withdraw 3k from the card into my account.




I don't think it's 'fair enough' at all!! You've conducted your financial affairs properly since you had the trouble and they're willing to give you a credit card, which would be much more difficult to pay off at the high interest rates.

I'd go back in and ask exactly why I was being refused. I'd argue each point on it's merits and ask them to reconsider the loan. Haggle, take a smaller amount and pay it back promptly. You need something on your credit rating to show that someone placed trust in you. Some credit unions make reports to ICB. I'd try to find out who these are and save with them. Take out a loan and repay promptly.


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## phoenix_n (21 Aug 2006)

If you default on a credit card versus a bank loan are different parties involved in trying to reclaim amounts owed ?


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## liteweight (22 Aug 2006)

phoenix_n said:


> If you default on a credit card versus a bank loan are different parties involved in trying to reclaim amounts owed ?



Very likely, I imagine the first your bank manager will hear of a default on a credit card is when he reads ICB report or internal report if card is with same bank.


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## bond-007 (23 Aug 2006)

Normally the Credit card dept is treated as a seperate entity from the bank, The bank being merely an agent of the credit card dept.


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## lff12 (23 Aug 2006)

Phone up telephone banking and ask why the loan was turned down - AIB, unlike a lot of institutions, are very upfront about telling you why the loan was rejected.  Then tell them that you want are going to close all your accounts unless this loan is approved.  See what happens.

If they don't, make an appointment for your neaest PTSB or National Irish Bank and switch all your accounts, including your credit card.  Make sure you make it very clear why you are changing.  NIB I know were very generous to me when I originally switched from AIB to them in 2004, and I'm now on my 2nd car loan having cleared the first in full with no missed payments.  In fairness at the time I changed not only was my credit history crap, thanks to BOI not updating loans it was also inaccurate and before I got it corrected it looked like I hadn't paid off a loan which I had.  Despite this I was still able to get a 3k loan from NIB (not to mention a VISA card and current account).

I've tended to move away from paying monthly direct debits as I find that external circumstances like not being paid on time or the fact that most utility companies put DDs out on different dates every month (eircom, ESB and Bord Gas take note) which makes it impossible to predict when they are due makes it impossible to budget.


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