Perfect credit score - turned down - is hubby to blame?

anna_d_2

Hi all,
Today I applied for a consolidation loan with Sainsbury's Bank.
I had done a smart search on Moneysupermarket prior to this and was told my credit rating was excellent.
I have two credit cards with balances and a Next Directory account. All are up to date and I have never missed a payment.
I do have two other dormant credit cards which have a 0 balance so I am only using about 30% of my available credit.

Anyway, I was turned down for the loan from Sainsburys.

Immediately I was concerned and checked my credit file with Experian - there is nothing at all untoward on it.

I went the one step forward and checked my credit scoring with them and it was 999. I don't think you can do much better than that.

There was one error relating to our time at our current address (for some reason Experian has it as just over 4 years when we have been here 6) but that's all.

Noiw I should say my hubby has a poor credit rating. He is rubbish with money to put it bluntly and we have two joint accounts - our mortgage and a current account we pay into to cover bills. I manage both of those accounts and they are always in good order - no missed payments, no charges etc.
I have my own current account which is never in the red.

Is it likely that his history is affecting me?
I know he applied for an overdraft recently and was refused and this search does show on my credit file for some reason.
There is also a search for him when he applied for insurance a few months back. (He was knocked back for the overdraft and approved for the insurance).

The last time I applied for credit was over a year ago when I took out a 0% CC which is coming to the end of it's term.

Obviouslt I'm smart enough to know the worst thing I can do is start throwing in applications here and there... but realistically what are my changes of getting this loan from any lender?
Should I be approaching my own bank?

I was just totally stunned today to be declined knowing how particular I am about my finances.

StuTheDon

Hi Anna,

I would have thought it unlikely that your husband's record is affecting you - unless there is an error on your credit file which needs to be cleared. Although, with a 999 score, this is unlikely.

What are the balances of your cards and Next account? If they are significant, the lender wont realise your total debt is the new loan amount. They may assume you want this loan on top of your existing debt and, when compared to your salary, they may believe it unmanagable.

Hope this helps....

anna_d_2

Thanks, my total debt is just over £5000.
My Next account however has a stupidly high limit which I would never even think of reaching, and I have an old catalogue account which I think I owe £40 on and have a stupid limit of £4000! (Madness)
I stated on the application it was for consolidation (although I did apply for a little more than the 5000 but not *that* much - I simply wanted to do a little home decoration as well).

My income is circa £25,000 per annum (salaried at £22,000, plus additional self employed earnings).

StuTheDon

Anna - that doesnt sound too bad debt wise - have you called Sainsbury's to ask why you were turned down? You can sometimes appeal these decisions.

Otherwise, you are absolutely correct - you dont want to go doing multiple searches as this will affect your score. If Sainsbury's cant help you maybe your own bank might be a next step. The banks have really tightened their criteria I am afraid!

anna_d_2

The email I got from Sainsbury's said they can't discuss why they made their decision - just that it was based on credit scoring.
I'm thinking of closing the two dormant CC accounts I have to see if that helps as it will obviously reduce my available credit. They may be worried I could overstretch myself financially, perhaps.

CLAPTON

do your credit files show a financial link to OH.. if so they will check his credit file and from what you say this will not be good news...

anna_d_2

Yes, we have a joint account and mortgage.
So it would show a link.
Can't see how I could undo the link though - I mean our mortgage is joint and likely to stay so.
I could, I suppose, tackle the joint account issue.

I'm really peed off about the whole thing.

iolanthe07

The reason you were turned down was probably your high amount of available credit (even thought you weren't accessing much of it) relative to a fairly modest income.

anna_d_2

Iolanthe - would you then recommend I close at least one of the dormant accounts?
One is with Virgin/ MBNA and has a credit limit of £4000 - but I don't intend ever to use the account again as I'm not an MBNA fan.

I tried to close my MBNA account before but it was like pulling teeth - I thought it would be a matter of phoning up but they were making me jump through hoops! :mad:

I had thought that having several accounts, with a zero balance, would work in my favour but I'm learning that isn't the case!

Rafter

anna,

The loan companies at the top of the best buy tables are looking for the very safest customers and although your credit rating is perfect, lending you £5000 on top of your existing debts and mortgage and on a salary of £22k could be seen as irresponsible on their part. Particularly as you have access to lots of other credit that could be counting against you.

By the time living costs are taken off your salary you could maybe afford to service £5,000 of debt but not £10,000 and they will have no guarantee that you will consolidate.

Their computers and risk models will also tell them that people who consolidate often run up debts on cards again and get into more difficultly than the average loan customer. That maybe unfair on you personally but it is often the case.

So your credit history is faultless, but the reason for your loan and income are probably letting you down.

I suggest you try a life of balance credit card transfer deal, or a loan from your own bank who will have a different way of 'credit scoring' you based on their experience of how you have operated your current account with them.

The rate of interest might not be as good as sainsburys, but you don't want to make multiple applications to other best buy loan companies and then find you get rejected for simply having too many searches.

Good luck

R.

nomoneytoday

Maybe the credit score was "too high" ? I'm