Turned down credit score 928 help!

Supermom

Don't know if anyone can help but my mum applied for a loan yesterday online for £15,000 (for a new car) with Cooperative bank but today they emailed here back to say no.

Had a look at her credit file and information as follows:

credit score 928 (good)
using 37% of avalible credit approx £5k owing credit cards & loans
no late payments
income £30k

but she dosen't own her own home, could this be the reason why they declined?

or is it because she wants too much?

any advice would be great she is getting in a bit of a flap
thanks

standupguy

I think you are right - lack of home ownership and amount requested unsecured. This is the effect of the credit crunch and banks being extra careful.

She could have more success with HP via the supplying dealer - get them to quote a low apr to compete with the bank apr?

jonesMUFCforever

Is the CO-OP her main bank?

Zapp_from_Planet_Zogg

Another consideration here is available credit.

You say she is using 37% of her available credit.

In order to prevent money laundering and fraud, banks will decline credit, (particularly for large loans) where they feel that there is a lot of credit already available. This is often irrespective of your credit rating.

They are always particularly nervous about unsecured loans with a high value, for this reason. It would be a much safer bet to go for car finance (as it is secured on the car).

She needs to be careful about rejected applications though - too many loan applications in a short time really bites your credit worthiness as it suggests that the applicant is in 'financial distress'. As she has just been rejected, I would suggest leaving it for a month or two then applying for car finance.

Supermom

Thanks for all the replies,

Co-op is not her main bank, not sure why she applied with them?

Would it be possible to apply for the HP with the dealer even though she has been declined on this loan, the HP would be through Ford, does anyone have any advice ?

Also she has a Black Horse loan and they are always sending her letters offering more money, would it be worth a try going to them?

She really seems to have her heart set on this car, and she's had a hard few years and I would really love to see her happy.

xxlaurissaxx

I would go through the finance, I just got accepted for a new car and honestly i didnt think i would as i had a few missed payments on my old car 1 year ago, but they came back next day and approved it. You should tell her to get the finance. xx

CLAPTON

Possessions don't buy you happiness.... if she already has debt she would be better off buying a modest but reliable car and get a much much smaller loan....

standupguy

Another Black Horse loan would entail another search and possibly a decline due to amount, on top of existing liability and unsecured nature.

Better to go to the Ford Dealer without further searches, and get HP.

They will sit her down with what is called , a Business Manager, and his job apart from sorting out the finance is to try and make more money from her by trying to sell add-ons such as PPI, gap insurance, extra warranties etc.

They also try and get a higher rate as it means more commission for them from the Finance company.

The key is to stand your ground, you do not have to have any extras, tell them that they are competing on rate to get the deal - and the apr needs to be....? - in single figures at least?

They will reduce the interest rate to get finance deals - they are targeted by the Finance company.

If in difficulty suggest that you may try other Ford dealers in the area to see what they can offer - that will focus their minds!

Supermom

Thanks to all,

I agree possessions dont buy happiness, but I as well as my mother would rather she was in a safe reliable car than an old banger, one of the reasons she has had such a hard time is that she was in a car crash (not her fault) a few years ago 4 people died in the other car which was an old banger the police afterwards said if it had been a newer car (air bags, better built etc) then they most probably would have survived. She has had years of councelling to deal with what she saw and has only just started driving again in my car which is a big 4X4 and she feels safe in that and safe driving my 3 little one around.

She has plenty of dissposable income and if she wants to spend it on a car that she feels safe in then why not?

Thanks again

Zapp_from_Planet_Zogg

Ford Credit will still do a credit search for HP.

Make the dealers business manager work for you (if they have one - some don't and rely on poorly trained salesmen). It is true that there is often flexibility in the rates they can offer - there may also be some slack in the car that your mum wants to buy, meaning that she may not need a £15k loan!

But do yourself a big favour and read up on flat-rate interest and the difference between it and APR. You must discuss flat-rates with the business manager, as if he is good, he can bury all sorts of things in the APR.

If she has been rejected already by Black Horse, the business manager may have a few more tricks up his sleeve too - dealers work with several finance houses and a good business manager will know which one is more likely to accept your mum now. Don't expect single digit APRs though - especially if already turned down. Single digit flat rates is more likely.

Also don't underestimate the worth of RTI GAP insurance! It can be a very valuable product and isn't necessarily just a money making scam - as a rule, people really do mis-understand this one. Just don't pay more than £300 for it (most dealers pay well less than £200 for it from the insurance companies). If your mum does go for GAP cover, make sure it is "Return To Invoice". If it can't be brought at a competitive rate from the dealer, it can be got from a few agents on the web.

Another tip - don't necessarily assume that threatening to shop around will win you any favours either. This month (August) is a very busy month for motor sales and many dealers don't need to offer preferential terms to get your business just now. December, Jan, Feb, May and June are the best months for a good 'negotiation'.

standupguy

Zapp_from_Planet_Zogg wrote: »

Another tip - don't necessarily assume that threatening to shop around will win you any favours either. This month (August) is a very busy month for motor sales and many dealers don't need to offer preferential terms to get your business just now.



Which planet are you on then? - Oh it's planet zogg?