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  • FIRST POST
    • QueenKatie
    • By QueenKatie 25th Nov 17, 12:21 PM
    • 19Posts
    • 2Thanks
    QueenKatie
    Referred to underwriter for credit, despite good credit score? What is going on?
    • #1
    • 25th Nov 17, 12:21 PM
    Referred to underwriter for credit, despite good credit score? What is going on? 25th Nov 17 at 12:21 PM
    Hi there

    My husband and I are trying to buy a new kitchen in Ikea and I want to take advantage of their 0% finance deal because it would avoid me having to close an ISA and pay a hefty interest penalty.

    However, the application to Ikano bank - in my husband's name - has been referred to an underwriter. I am concerned as to why this has happened, because I can literally think of no reason whatsoever why we would be considered a credit risk.

    Last time we applied for credit was in 2015, for a mobile phone contract and we had difficulties getting one of those too. We ended up having to send them our Experian report.

    Please help us to understand what we are doing wrong, or what the issue might be because we are very worried that there is something against one of us that we are unaware of.

    Our situation:

    - We have no debt, store cards or car finance, apart from a small amount outstanding on the mortgage.
    - We are married, though neither of us has changed their name
    - My husband is employed full time and has been at the same job/institution for 15 years
    - We have lived at the same address for the last 10 years and are homeowners
    - The amount we want to borrow is a fraction of my husband's monthly earnings - repayments would be less than 5% of net monthly income after tax, and he is a higher rate tax payer
    - We have a very low mortgage and no debt so lots of disposable income
    - We have a 999/999 credit rating on Experian, and a 659 credit score on Noddle. Both reports make it clear that we have never been late with a single payment for anything
    - We have 2 credit cards, which are do use. They are always paid off in full each month and our credit limit on them combined is £16k
    - We have no CIFAS issues (as far as we are aware)
Page 1
    • QueenKatie
    • By QueenKatie 25th Nov 17, 12:28 PM
    • 19 Posts
    • 2 Thanks
    QueenKatie
    • #2
    • 25th Nov 17, 12:28 PM
    • #2
    • 25th Nov 17, 12:28 PM
    Oh, and I should add - the Ikano bank has checked my husband's Experian report - we know because we can see the trace on the file!! So they have the information that we are low risk. Very confused.
    • sourcrates
    • By sourcrates 25th Nov 17, 12:39 PM
    • 12,670 Posts
    • 12,001 Thanks
    sourcrates
    • #3
    • 25th Nov 17, 12:39 PM
    • #3
    • 25th Nov 17, 12:39 PM
    Hi,

    Every bank has different lending criteria, credit scores are pretty meaningless to be honest, the fact you clear your cards every month tells the lender you may not make them any profit, as its a zero % finance deal you are chasing, they will be looking much further ahead, to see what kind of potential future customer you will be.

    If you never pay interest on your cards, then your probably not the kind of customer they are looking for.

    It will be something along those lines most likely.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
    • Sncjw
    • By Sncjw 26th Nov 17, 11:18 AM
    • 1,497 Posts
    • 891 Thanks
    Sncjw
    • #4
    • 26th Nov 17, 11:18 AM
    • #4
    • 26th Nov 17, 11:18 AM
    If you have a lot of disposable income could you not save the money each month and the buy it in cash?
    • DCFC79
    • By DCFC79 26th Nov 17, 11:20 AM
    • 30,399 Posts
    • 19,220 Thanks
    DCFC79
    • #5
    • 26th Nov 17, 11:20 AM
    • #5
    • 26th Nov 17, 11:20 AM
    You do realise that Ikano are perfectly entitled to refer the application to an underwriter.
    Can people stop loaning money/being a guarator to family/friends, it rarely ends well and you lose out as your money is gone or you get shafted with being a guarantor.
    • Samsung_Note2
    • By Samsung_Note2 28th Nov 17, 9:14 AM
    • 201 Posts
    • 75 Thanks
    Samsung_Note2
    • #6
    • 28th Nov 17, 9:14 AM
    • #6
    • 28th Nov 17, 9:14 AM
    Hi there

    My husband and I are trying to buy a new kitchen in Ikea and I want to take advantage of their 0% finance deal because it would avoid me having to close an ISA and pay a hefty interest penalty.

    However, the application to Ikano bank - in my husband's name - has been referred to an underwriter. I am concerned as to why this has happened, because I can literally think of no reason whatsoever why we would be considered a credit risk.

    Last time we applied for credit was in 2015, for a mobile phone contract and we had difficulties getting one of those too. We ended up having to send them our Experian report.

    Please help us to understand what we are doing wrong, or what the issue might be because we are very worried that there is something against one of us that we are unaware of.

    Our situation:

    - We have no debt, store cards or car finance, apart from a small amount outstanding on the mortgage.
    - We are married, though neither of us has changed their name
    - My husband is employed full time and has been at the same job/institution for 15 years
    - We have lived at the same address for the last 10 years and are homeowners
    - The amount we want to borrow is a fraction of my husband's monthly earnings - repayments would be less than 5% of net monthly income after tax, and he is a higher rate tax payer
    - We have a very low mortgage and no debt so lots of disposable income
    - We have a 999/999 credit rating on Experian, and a 659 credit score on Noddle. Both reports make it clear that we have never been late with a single payment for anything
    - We have 2 credit cards, which are do use. They are always paid off in full each month and our credit limit on them combined is £16k
    - We have no CIFAS issues (as far as we are aware)
    Originally posted by QueenKatie
    If you struggled for a phone contract,then id suggest looking at all three CRA"s and not just experian.

    The others might have conflicting information and as we all know,companies can and do use more than one CRA.
    If my appalling spelling offends you that much...dont read my posts.
    • Tarambor
    • By Tarambor 29th Nov 17, 11:17 AM
    • 1,740 Posts
    • 1,196 Thanks
    Tarambor
    • #7
    • 29th Nov 17, 11:17 AM
    • #7
    • 29th Nov 17, 11:17 AM
    If you have a lot of disposable income could you not save the money each month and the buy it in cash?
    Originally posted by Sncjw
    But the way they want to do it they make money. The whole idea of using a 0% purchase option when you have the money to buy outright is so that money can continue to be sat in a high interest account earning interest for the period of the 0% loan thus leaving you better off than you would have been had you just paid for it there and then. It can be effectively thought of as getting an additional discount at the interest rate of the account the money is sat in.
    • Candyapple
    • By Candyapple 29th Nov 17, 11:26 AM
    • 2,495 Posts
    • 1,862 Thanks
    Candyapple
    • #8
    • 29th Nov 17, 11:26 AM
    • #8
    • 29th Nov 17, 11:26 AM
    Check all 3 of the CRAs to make sure there is no erroneous data:
    Experian: www.moneysavingexpert.com/creditclub
    Equifax: www.clearscore.com
    Call Credit: www.noddle.co.uk

    Are the credit cards in your name or your husband's? If they are in your name, then the data won't be recorded on your husband's file.

    Do you have a bank account each showing on your files?

    What about your mobile phone contracts?

    Are you both showing as being on the electoral roll?

    If everything is correct then the reason will be what sourcrates stated - you are not financially viable for them to make a profit off.
    I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com
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