Halifax Loan declined- worth appealing?

ChaniaChania

Hello all MSE's, this is my first post so please be gentle!

I bank with Halifax (held since 2002) and have an overdraft of £3k a credit card with Vanquis since February 2007. I have had bad credit in the past including defaults but I paid all of these amounts off at the end of Dec 2006/ start of January 2007. I took out the credit card in order to rebuild my credit and have not missed or had a late payment in the 23 months I have had the card. I earn £26k a year which is paid into my Halifax account every 4 weeks. However my Experian Credit Score is in the ‘Poor’ classification. I made an online application with Halifax for a loan of £8k to pay off the above plus an amount owed to an ex-partner but this was declined, which I totally understand due to my credit rating.

However, I just wondered if anyone had success in appealing a declined loan decision by writing to the Halifax or any other High Street banks?

Many Thanks in advance

Rafter

Chania,

There could be a number of reasons halifax refused. If you add your loan application of £8k to your overdraft and other debts you end up with a number higher than half your salary. Halifax could be held to be negligent if they lent you more than you can reasonably afford.

Consolidating debt is often not the answer though. You should try to get a proper budget together and then tackle your debt in pieces. Maybe open a second bank account so all your direct debits and regular bills come out of one and the second is what you have left to spend each month.

If you had debt problems during the time you banked with halifax, and they lost interest or money when you sorted yourself out at the end of 2006, they may never lend such a large amount to you again because you are seen as high risk.

You should alos get hold of a copy of your experian credit report, check it is accurate and make sure you are on the electoral roll and that previous address details are accurate. All these might be dragging your score down.

R.

ChaniaChania

Thank you very much for your helpful response.

I did put my reason for the loan as consolidation; do they not take into account the fact that some of the debt will be cleared so total debt would be £8k?

Halifax did pay me back some bank charges (c£250) in December 2006 which went towards paying off some of my other debts; could this also be part of the reason I was declined? But I have never defaulted or made late payments to Halifax at all. I had one defaulted Credit Card in July 2004 which I paid off in January 2007 and a loan that was registering on my credit file as 6 payments late for a number of months (as I had a payment plan with them directly) but I settled this in October 2006.

Re your suggestion of opening another account, I have actually considered this as well but was unsure which way round to do this? I am aware that banks offer basic bank accounts which could provide a good solution for me, but would I use the new (overdraft free) account to receive my salary or my old one with the overdraft. I would not want to do anything that could further damage my credit score or have the Halifax ask for the full amount back on the overdraft.

I am a member of Credit Expert and have checked my credit report and all is all correct, I have been registered on the electoral role for the last 8 years (although at a couple of addresses).

Thanks again for your support.

enjoyincubus

ChaniaChania wrote: »

However, I just wondered if anyone had success in appealing a declined loan decision by writing to the Halifax or any other High Street banks?

Everyone has the right to appeal a decision in writing if they have been declined by an automated system (eg if you were declined because you failed the score cut-off). The decline letter you recieved should have a contact address for you to appeal the decision (I am guessing it will be a Leeds address).

You have nothing to lose, and it will only be the cost of a stamp.

ChaniaChania

Thankyou. As I made the application online, I received a short email in response not a letter. I have looked on the Halifax website which suggests writing to the manager of the branch?